VISION

To make auto industry a global player, achieving

competitiveness through a critical mass of
production, contributing to the GDP by 5.6% by
2012, attracting large investments, development of
technologies and human resource through a well
structured policy framework formulated in
consultation with stakeholders.
 Message From the Minister for
Industries, Production and Special Initiatives

The Pakistan Auto Industry has become a leading industrial sector to steer the growth in
large scale manufacturing sector. The high economic and job multiplier of this industry and
its deep forward and backward linkages in global context and with special reference to
Pakistan, make the auto industry a key player in the national economy.
After successfully completing the preparation phase which led to setting up of large number
of vending companies and assemblers of vehicles and achieving significant level of
localization, the next phase which is the development phase would spread over next five
years which offer many challenges, important being the continuation of high growth,
development of technologies, achieving competitiveness, human resource development,
investment and compliance to safety, quality and environment standards.
The goals set by the Government and Industry together can only be achieved through a
comprehensive development policy which could address all the cross-sectional issues. Auto
Industry Development Programme therefore aims to address the core issues including the
predictable and stable tariff environment for the next five years besides other non-tariff
initiatives.
The able leadership of my predecessor Mr. Jahangir Khan Tareen is gratefully acknowledged
on steering the AIDP initiative and getting it approved from the Government. While
acknowledging the dedication and hard work of EDB and the stakeholders in preparing
AIDP, I wish all the success to the auto industry to face future challenges and achieving the
goals of sustainable development and becoming a global player.

Salmaan Taseer
Islamabad
January, 2008
 Table of Contents

Abbreviations i
Foreword v
Preface ix
Executive Summary xiii
1. Global Scenario: Auto Industry 1
2. Perspective of Pakistan Auto Industry 5
2.1 O.E Sector 5
2.2 Vending Sector 7
2.3 Growth Drivers 9
2.4 Growth Opportunities 11
2.5 Safety, Quality & Standards and Emission Control Policy 11
2.6 Auto Sector Exports 13
2.7 Challenges 13
2.8 Auto Industry in Context to Manufacturing Sector 14
3. Auto Industry Development Programme (AIDP) 19
3.1 Need and Urgency of AIDP 19
4. Five Year Tariff Plan 25
5. Human Resource Development (HRD) 31
5.1 Mission Statement 31
5.2 Situation Analysis 32
5.3 Identification of Required Skills 32
5.3.1 Component Manufacturing Skills 32
5.3.2 Assembly Shop Floor Skills 32
5.3.3 Vehicle Maintenance Skills 32
5.4 Subjects 32
5.4.1 Production Shop Floor 32
5.4.2 Vehicle Diagnostic Maintenance & Repair 33
5.5 Faculty 33
5.6 Auto Industry Skill Development Company (AISDC) 34
5.7 Automotive Centers of Excellence 34
6. Productive Asset Investment Incentive (PAII) 37
6.1 Objectives 37
6.2 Incentives 38
6.3 Eligible Entities 38
6.4 Qualifying Productive Assets 38
6.5 Qualifying Value of Assets 38
6.6 Documentation 38
6.7 Claims for PAII 39
6.8 Ceding of PAII Credit Certificates to OEMs 40
6.9 Procedure of Transfer of PAII Credit Certificates 40

Auto Industry Development Programme

Table of Contents

6.10 Processing of Claims 40

6.11 Claims for Subsequent Year’s PAII Credit Certificate 40
6.12 Assessment and Review of PAII 41
6.13 Withdrawal of PAII Credit Certificates 41
7. Technology Acquisition Support Scheme (TASS) 45
7.1 Eligible Entities 46
7.2 Eligibility Criterion 46
7.3 Assessment Criterion 46
7.4 Administration of the TASS 47
7.5 Documentation 47
7.6 Claims for TASS 48
7.7 Assessment and Review of TASS 48
7.8 Withdrawal of Technology Acquisition Matchmaking Grants 49
8. Auto Cluster Development 53
9. Auto Industry Investment Policy (AIIP) 59
9.1 Definition 59
9.2 Eligibility Criteria 59
9.3 Benefits 60
9.4 Withdrawal of AIIP Incentive 60
10. Auto Industry Development Committee 63
Annexures
Annex I Productive Asset Investment Incentive – Form I to VII 69
Annex II Technology Acquisition Support Scheme – Form I to III 93
Annex III Auto Industry Investment Policy – Form I 109
Annex IV Working Groups 115

Auto Industry Development Programme (AIDP)

 Abbreviations

AIDC Auto Industry Development Committee

AIDP Auto Industry Development Programme
AIIP Auto Industry Investment Policy
AISDC Auto Industry Skill Development Company
AT&TC Automotive Testing & Training Centre Ltd
CBU Complete Built Up
CEO Chief Executive Officer
CNC Computerized Numerically Controlled
CKD Complete Knocked Down
CTL Central Testing Laboratories
EDB Engineering Development Board
FBR Federal Board of Revenue
FTA Free Trade Area
GDP Gross Domestic Product
HCV Heavy Commercial Vehicles
HEC Higher Education Commission
HRD Human Resource Development
I.C Indigenization Committee
ISDP Industry Specific Deletion Programme
JV Joint Venture
LC Letter of Credit
LCV Light Commercial Vehicles
M / o IP&SI Ministry of Industries, Production and Special Initiatives
MVR Motor Vehicle Registration
MIRDC Metal Industry Research Development Centre
MW Mega Watt
NAVTEC National Vocational & Technical Education Commission
NTCIP National Trade Corridor Improvement Programme
N.W.F.P North West Frontier Province

Auto Industry Development Programme i

Abbreviations

O.E Original Equipment

OEM Original Equipment Manufacturers
PAII Productive Asset Investment incentive
PAMA Pakistan Automotive Manufacturers Association
PAAPAM Pakistan Association of Automotive Parts Accessories Manufacturers
PIDC Pakistan Industrial Development Corporation
PSQCA Pakistan Standard & Quality Control Authority
PSDP Product Specific Deletion Programme
PSI Pakistan Standards Institute
PTA Preferential Trade Agreement
SAFTA South Asian Free Trade Area
SEDC State Enterprise Display Center
S.T Sales Tax
STP Software Technology Park
SMEs Small & Medium Enterprises
TAA Technology Acquisition Agreement
TBS Tariff Based System
TASS Technology Acquisition Support Scheme
TRIMs Trade Related Investment Measures
TEVTA Technical Education and Vocational Training Authority
TUSDEC Technology Upgradation and Skill Development Company
VTCs Vocational Training Centers
WTO World Trade Organization

ii Auto Industry Development Programme

Foreword

iii
iv
 Foreword

The rapid growth in the economy during the last few years has stimulated the manufacturing
growth, and more so the auto industry which has out performed the other sectors in
production and sales. Increasing disposable income, availability of financial options besides
the government’s economic reform policy and the professional approach of the assemblers
and vendors have helped the industry to reach to a highly satisfying stage in the last 6 – 7
years. Auto Industry’s smooth transition during the last year from the Deletion Programmes
to a competitive Tariff Based System (TBS) has been highly encouraging which expresses the
capacity of industry to cope with the challenges.

Sustainable economic growth projected for future would take the auto sector to a critical
mass where many things will start happening. Importantly being the development of
technologies and components, mainly the high value added and critical components,
improving the quality of products, attaining high standards of safety, quality and
environment thereby satisfying the consumers’ expectations. The issues of low cost
production to compete internationally and adopting global trends in producing fuel efficient
and environment friendly vehicles, coming out of trade deficit to a foreign exchange neutral
regime in the next five years, and going into surplus will remain dominant in the policy
environment. AIDP is geared to provide necessary support to achieve all these objectives.
The role of international companies and partners and their increasing interest in Pakistan
market due to its potential, government policies and growth opportunities speaks of limitless
scope for production and exports.

The Auto Industry Development Programme covering the next five year road map of tariffs
and non-tariff initiatives along with the collaborative implementation and assessment of
policy through the stakeholders, express government’s keenness and urgency to take this
industry global.

I gratefully acknowledge the passion and commitment of EDB, relevant government

departments and the industry stakeholders in finalizing the AIDP. I want to thank Mr.
Jahangir Khan Tareen former Minister also for his guidance and leadership to successfully
steer the process of approval of AIDP.

Shahab Khawaja
Secretary
Ministry of Industries, Production & Special Initiatives
Islamabad
January, 2008

Auto Industry Development Programme v

vi
Preface

vii
viii
Preface

Pakistan Auto Industry has been a star performer of industrial sector during the last 6 to 7
years, and has registered impressive annual compound growth, surpassing other sectors of
the economy. The industry adopted the Tariff Based System (TBS), after elimination of
Deletion Programmes, without any major hiccup, during the year 2006. This reflects the
strength and resilience of the industry. It can cope with the challenges of competitive
environment. The continuation of high growth, improving the quality and achieving the
cost competitiveness while satisfying the consumer expectations and environment standards
will remain a task in the future too.
Becoming a part of global supply chain and exporting 2/3 wheelers, cars and tractors in
particular, will remain a goal both for the government and the industry. The industry is
moving towards attaining a critical mass of production, is acquiring latest technologies,
improving human resource, and is attaining supply chain and global connectivity.
Pakistan Auto Industry has potential to become a global choice for outsourcing, off shoring
and becoming part of the global supply chain.
To provide a vision and a stable environment, government decided to give a five years pre-
announced tariff along with an environment to encourage the investments, technology
development, production of high value added components, dedicated centers of excellence
for HRD and the standards for quality, safety and environment
The need of a comprehensive development plan was realized during the process of switching
over from the Deletion Programmes to TBS. The objectives were to provide pre-announced
tariffs and to focus on the policy and administrative issues which could lead to sustainable
development and growth.
An intense consultation process remained the hallmark of AIDP which included two
country level workshops and number of meetings in EDB and Ministry of Industries and
Production with all the stakeholders. Committees were formed to finalize tariffs and to
deliberate on the issues of human resource development, technology, investment and cluster
and infrastructure development.
The government’s guiding principle to involve stakeholders, not only in the policy
formulation process but during implementation as well, is apparent from the notification of
Auto Industry Development Committee, which has a majority of private sector stakeholders.
All the cross sectional issues faced by the industry on development, growth and
competitiveness to make it a global player, will be deliberated and addressed by the AIDC.

Auto Industry Development Programme ix

Preface

The efforts of relevant officers of the Ministry of Industries and Production, The
Engineering Development Board, especially the policy department, and the stakeholders, for
resolving cross sectional issues, identifying challenges and possible solutions through Auto
Industry Development Programme are appreciated. The efforts of the previous CEO Mr.
Imtiaz Rastgar are acknowledged and appreciated for starting the dialog and completing this
Program while keeping all stakeholders on board. The passion and hard work of Dr. Akram
Sheikh, ex Chairman for developing the vending industry through the Deletion programs is
also acknowledged and appreciated.
The real challenge will now be the implementation of AIDP, its assessment and monitoring,
and to make efforts to keep it on the path so determined jointly by the government and the
industry. The government will continue to give high focus and attention to this sector to
achieve the objectives and targets jointly determined in the policy framework

Almas Hyder
Chief Executive Officer
Engineering Development Board

Islamabad
January, 2008

x Auto Industry Development Programme

Executive Summary

xi
xii
 Executive Summary
1. Pakistan is amongst a few countries of
the world which manufacture all kinds
of vehicles i.e. 2/3 wheelers, motor-
cars, LCVs, tractors, prime-movers &
trucks and buses. The total country
requirements are generally met from
the local production except the import
of certain categories of trucks &
prime-movers. Import of used cars is
allowed to the bonafide ex-patriate
Pakistani’s and travelers only under
the baggage scheme. The presence of
few of world acclaimed brands and
multinationals in the manufacturing of
vehicles for the last 2 to 3 decades and
their regular expansion plans speak of
their confidence on the market,
government policies and economic
potential of the country. Pakistan auto
industry turnover during the year
2005-06 crossed US $ 3.6 billion
which comes to 2.8% of GDP (2005-
06), thus saving substantial foreign
exchange on imports. The job
contribution by auto industry comes
to nearly 1.392 million which includes
direct jobs of nearly 192,000. The auto
industry remains second largest tax
payer in terms of its contribution to
customs duty, sales tax and
withholding tax. The export
contribution however, is marginal and
growing slowly, which otherwise has
high potential to grow in the coming
years.
2. Pakistan auto industry produced over
1 million vehicles including 2/3
wheelers during the year 2006-07,
Auto Industry Development Programme
mainly due to government’s economic
reforms and availability of financial
options and leasing facilities on
purchase of vehicles. The industry has
now positioned itself well to cope
with increasing demand. The
production figures are growing much
faster than international automobile
production. The yearly growth in the
recent years has surpassed the auto
industry growth in the competing
countries. Pakistan’s total share of car
and commercial vehicles remains
0.37% of the world production during
the year 2006-07. Auto industry
integration in the global market in
terms of export remains marginal.
Global trade of automobiles is over
US $ 1 trillion.
3. The auto industry contribution to
other sectors of the economy both
tangible and intangible is highly
significant. The auto industry
economic and job multiplier in
Pakistan context would be around
Rs.1 : 3 and 1 : 8 respectively. While
the auto industry’s deeper forward and
backward linkages have created
dissemination of systems, technology,
skill development and providing base
to the rest of engineering sector. Its
deeper backward integration due to
consumption of local and imported
materials and toolings such as steel,
aluminum, copper, plastics &
chemicals, rubber & glass and its
forward linkages in the form of retail
& wholesale, dealerships & logistics,
workshops & maintenance, filling
xiii
Executive Summary
stations, finance & insurance,
marketing, advertising and
consultancy services and trade, speak
of its contribution and future role for
the industrial development of the
country. The auto industry in recent
years has been the star performer and
it remained a leading sector in the
large scale manufacturing which
helped in increasing the share of
manufacturing in the country’s GDP.
4. The recent rapid growth phase of auto
industry witnessed many new vending
companies establishing throughout the
country. High growth in production in
recent years is leading to a critical
mass of vehicles which would be
achieved in a few years. High growth
production also exposed the issues of
quality, competitiveness, supply chain
and human resource management
which are being dealt by the industry.
5. The auto industry expressed resilience
during the last 1 ½ year when it
switched over from compulsory local
content conditions to a TRIMs
compliant tariff based system (TBS)
which came into effect on 1st July,
2006. The changeover was relatively
hassle free for the assemblers but has
posed many challenges to the vendors
who remained comfortable in the
previous system and are now pushed
to improve the quality, supply
systems, shop floor efficiencies and
better marketing. The industry
nevertheless faces a challenge of
relatively poor human resource skills
and productivity despite it being cheap
and abundantly available. The issues
of re-location, mergers and lean and
mean production technologies are
now more frequently discussed in the
stakeholders meetings. Investment in
xiv
modern production infrastructure,
testing equipment and automation
remains high priority.
6. The vendors are mostly SMEs which
are developing their approach and are
looking for professional support to re-
integrate and re-design their work
flow processes and improve quality
through better technologies, testing
equipment and adoption of best
manufacturing practices.
7. The government role as a regulator in
the new environment has minimized
as now it is out of micro management.
Government’s focus rather remains
on areas which could lead to
sustainable development of auto
industry, taking its due share in the
international market. With this
objective in view, government
initiated deliberations on AIDP
8. The consultations on the development
of AIDP kicked off from the 8th
March, 2006 Workshop at Islamabad
by clearly defining the objectives at a
time when the industry was switching
over from the deletion programmes to
a competitive tariff based system.
There was realization that the
transitionary phase may affect the
rapid growth and sustainable
development of auto industry. A
comprehensive development
programme with pre-announced
tariffs to provide predictable and
stable environment was therefore
much needed. Until the finalization
and approval of AIDP by the
government on 13th November, 2007
a great deal of fair consultation
process was undertaken with the
government and industry
stakeholders. Most of the committees
Auto Industry Development Programme
 Executive Summary

involved in deliberating various and deliberate approach. The

components of AIDP were steered by cornerstone of approach remains
the experts from the auto industry due close consultation and ensuring
to which this programme has the stakeholders participation in
rightful ownership of the entire implementation and assessment of
automotive industry policy.
9. Government has recently approved a 10. AIDP envisage to achieve a critical
5 year tariff plan for the auto sector to mass of production, double the
ensure a stable and predictable contribution of auto industry to GDP
environment and to facilitate from the existing 2.8%, by the year
investment. Government is now 2011-12 with high focus on
focused on facilitating the industry investment, technology upgradation,
through development of increasing its exports to US$ 650
infrastructure, human resource million, enhancement in jobs
development, technology acquisitions, alongside the development of critical
investment in productive assets, components to further increase the
cluster development and development competitiveness of domestically
of standards on safety, quality and produced vehicles.
environment through a well structured

**********

Auto Industry Development Programme xv

16
Global Scenario: Auto
Industry
1
Global Scenario: Auto Industry

The automotive industry is million units), US (11.264 million

considered as an economic
heavyweight due to which it has
acquired the status of a key sector of
the economy for every major
country in the world. The annual
global turn over of auto industry
during the year 2005 remained $2.8
trillion while the size of trade has
grown to a massive level of $ 1,016
billion, which represents 9% of the
world merchandise trade. In 2006,
over 69 million motor vehicles
including cars, vans, trucks, buses
and coaches were produced
worldwide. In 2006 Japan (11.484
units), China (7.189 million units),
Germany (5.820 million units) and
South Korea (3.840 million units)
were the top five motor vehicle
producing countries in the world.
Auto industry employed directly
over 5% of the world’s total
manufacturing labour force and
contributed over $ 634 billion in tax
revenues of twenty countries only.
The auto industry is one of the
largest investor in Research and
Development, which help to
increase the technology level in
other industries as well.

World Motor Vehicle Production

Units in Nos
Years Cars Commercial Vehicles Total

1999 39,759,847 16,499,045 56,258,892

2000 41,215,653 17,158,509 58,374,162
2001 39,825,888 16,479,037 56,304,925
2002 41,358,394 17,635,924 58,994,318
2003 41,968,666 18,694,559 60,663,225
2004 44,554,268 19,941,952 64,496,220
2005 46,862,978 19,619,461 66,482,439
2006 49,886,549 19,240,607 69,127,156
Source: OICA

Auto Industry Development Programme 1

 1 - Global Scenario: Auto Industry
The world motorcycle production
has increased 24% during 2003 to
2006 (from 30 million units in 2003
to 40 million units in 2006). Asia
(including Japan) holds 90% share in
world motorcycle production. In
Asia, China (21.44 million Units),
India (8.38 million units) and
Indonesia are the major producers.
The competition in the global
market is getting fiercer; the global
players are eying their presence in
the new developing markets. The
markets in Canada, USA, Western
Europe and Japan are stagnating,
while those in South America
(especially Brazil), Eastern Europe
(especially Russia), and Asia are
growing. China has become the
second largest car market in the
world outrunning Germany last year
and getting closer to Japan this year.
The global industry is slowly and
gradually shifting towards Asian
countries, mainly because of
saturation of automobile industry in
the Western world. The world's
largest automobile manufacturers
are planning to invest into
production facilities in emerging
Asian markets in order to reduce
production costs. Low cost vehicles
(scooters, motorcycles, small
passenger cars etc) are driving the
growth of automotive industry in
China and other developing
economies. It offers immense
opportunities for global players in
.
**********
2 Auto Industry Development Programme
these economies. These emerging
markets include Latin America,
China, India, Malaysia and other
markets in Southeast Asia. From
long-term perspective, cheap
financing and price discounts, rising
income levels, and infrastructure
developments will drive the growth
in majority of the Asian automotive
market. Pakistan also have the
opportunity to become a part of the
global supply chain by increasing
capacities, achieving certain level of
economies of scale, technology up
gradation and skilled human
resource. To save the time in
designing and improving the quality
of automobiles, the world
automobile companies are adopting
computer aided manufacturing tools
due to rising pressure of cost and
quality. The changing models, fuel
efficiency, cutting costs and
enhancing user comfort without
compromising quality are the most
important challenges for the auto
industry in a fast globalizing world.
Global auto industry is faced with
two following challenges which need
to be addressed in order to remain
competitive;
• The carbon and climate
protection
• Make availability of vehicles at
low cost with new climate
friendly energies.
Perspective of Pakistan
Auto Industry
4
2
Perspective of Pakistan Auto Industry
2.1 O.E. Sector
Pakistan Automobile Industry
produced its first vehicle in 1953, at
the National Motors Limited,
established in Karachi to assemble
Bedford Trucks. Subsequently
buses, light trucks and cars were
assembled in the same plant. The
industry was highly regulated until
the early 1990’s. After deregulation
major Japanese manufacturers
entered in the market thereby
creating some competition in this
sector. Assemblers of HINO
Trucks, Suzuki Cars (1984), Mazda
Trucks, Toyota (1993) and Honda
(1994) in particular, entered once
deregulation was introduced.
Assembly of Daihatsu and Hyundai
cars (1999) and various brands of
LCVs and range of mini-trucks
commenced recently.
Pakistan auto industry observed a
“Preparation Phase – 1985-05”
which was based on the formulation
and implementation of compulsory
local content conditions, commonly
referred as deletion programmes.
Deletion programmes worked on
the basis of Industry Specific
Deletion Programmes (ISDPs) and
Product Specific Deletion
Programmes (PSDP). Under these
programmes annual deletion targets
for each model of vehicle would be
set by giving choice to assembler to
Auto Industry Development Programme
choose components from a basket
carrying fixed indices based on their
individual values. The EDB would
conduct the technical audits
annually to determine the
achievement or shortfall of deletion
targets. In case of shortfall,
assemblers would be penalized by
charging the CBU rate of duty on
the value of components which
were not indigenized in that period.
Coupled with government’s macro
economic reforms and rapid
economic growth from the year
2001 onwards, and through effective
monitoring and implementation of
deletion programmes, local content
increased substantially. The
localization nevertheless was less in
those components which were high
value added or critical in design and
operation. The “Preparation
Phase – 1985-05” observed couple
of car assemblers and dozens of
2/3-wheelers coming into operation.
The economic objectives of that
time i.e. import substitution, job
creation and investments in OE and
vending sectors were achieved to a
large extent.
The auto industry has recently
entered into a “Development
Phase – 2005-12” where the
consolidation of initial achievements
has started taking place alongside
the development of strategy to
5
2 – Perspective of Pakistan Auto Industry
shape the industry in the new
competitive environment. The
doing away of deletion programmes
and its replacement with the TRIMs
compliant TBS from 1st July, 2006
was indeed a paradigm shift in the
business environment as the tariff
rates would determine the choice of
an assembler rather than the
government’s micro management
and day to day negotiation and
monitoring. Under the TBS,
assemblers have got the choice of
buying the components at most
competitive price, quality and
improved supply chain.
In the development phase
government is focused on
facilitating an environment to
achieve a critical mass of production
of vehicles which is a pre-requisite
to development of high value added
and critical components. The issues
of technology acquisition, HRD,
competitiveness, research and
development, innovation and
investment have gained more
importance over the tariff
management, which nevertheless
Table: Import Tariff on Cars
2002-03
Up to 1500cc 75-100%
From 1500cc to 1800cc 125%
Exceeding 1800cc 200%
6 Auto Industry Development Programme
remains one of the important tools
in policy management. During the
preparation phase, assemblers
played a significant role in
transferring technologies, helping
vendor development, building the
management capacities to fulfill
market and consumer expectations.
Development of vendor’s cluster by
Pak Suzuki Motors Company Ltd.
around its plant recently and gradual
optimization of number of vendors,
supply chain improvement and
training speaks of the crucial role
which an OEM will play in future.
During preparation phase, import
tariffs on CBU’s of cars and HCV’s
remained very high and started
phasing down rather quickly in the
later part. The import of used cars
due to high import duties remained
minimum and was allowed only to
the overseas Pakistanis under the
transfer of residence, baggage and
gift schemes. High import of used
cars in the last 2 to 3 years was
however, to bridge temporary
demand – supply gap.
2003-04 2004-05 2005-06 2006-07
75-100% 50-70% 50% 50%
125% 80% 65% 65%
150% 100% 75% 75%
 2 – A Perspective of Pakistan Auto Industry
The envisaged third phase starting
from 2012 onwards will be the
“Global Era” for Pakistan auto
industry in which the industry will
re-position itself to become a global
player through enhancing high value
added production. The industry will
have sufficient number of Tier-1 /
Tier-2 vendors which are generally
recognized as vendors having the
capacity to develop design and
toolings of the components
manufactured in-house or through
other vendors. These vendors are
considered as part of global supply
chain and many overseas assemblers
outsource manufacturing of
components to them.
By the start of “Global Era Phase”
the industry is expected to achieve
the scales due to high production
level duly supported by the size of
GDP of $210 Billions by 2012 and
per capita income reaching to $
1,300.
Global flattening and information
dissemination of development of
pool of highly skilled people,
acquisition and development of
technologies, improvement of
infrastructure and living conditions
will drive the auto industry to
produce high standard, fuel efficient
and environment friendly vehicles in
a better price range, satisfying the
consumer expectations. Auto
industry due to continued attention
of the government will remain a star
performer and lead the large scale
manufacturing growth. It will be one
of the largest foreign exchange
earner through export of
Auto Industry Development Programme (AIDP)
components and CBU’s in the
future.
In this backdrop, the overseas
principals of local companies are
expected to take Pakistan market as
a regional hub to manufacture and
export. The consumers concerns on
quality, safety and after sale service
along with relatively less
sophisticated engine technologies
and features are still the growing
challenges for the local industry.
2.2 Vending Sector
The local vending industry
comprises of around 200 recognized
vendors supplying directly to the
assemblers and nearly the same
number of un-organized vendors
mainly catering to the requirements
of major vendors. Most of the
vending companies were established
during the preparation phase (1985
to 2005) when the government
unfolded economic reforms and
started effective implementation of
deletion programmes.
The import of auto parts even for
the after market remained highly
protected. In the rapid economic
growth phase, vendors optimally
used their capacities which were
relatively small and continued
reinvesting in the productive assets
to manufacture new products and to
improve quality. Most of the
vendors remained internally focused
as the premiums were high due to
government support on compulsory
local content. Due to lack of a
critical mass of production for the
cars and motorcycles, the scales
7
2 – Perspective of Pakistan Auto Industry
could not be achieved by most of
the vendors. A majority of the
vendors were unable to develop
designs, tooling and evaluation
facilities and therefore could not
reach to a tier – 1 level.
The government has been
facilitating the vendors on import of
inputs at reduced duties while the
raw-materials are free of customs
duty through a notification. During
the preparation phase, few of the
assemblers started developing their
own subsidiaries as vendors. They
develop sheet metal and skin parts
in-house, recognizing that key to
competitiveness was in high
localization levels.
Pakistan auto industry is still not a
direct vendor of principal
assemblers. However, some
technical cooperation agreements,
with the known Japanese companies
do exist. Some of the assemblers
nevertheless played important role
in transfer of technologies and
development of vendors.
The production value of auto
components both for the O.E and
after market would be around US$ 1
billion during 2005-06. The export
of auto parts is low however, the
recent years showcasing of auto
components in major international
exhibitions arranged by EDB and
the new competitive environment
has stimulated some of the vendors
to look for overseas customers.
Low export volumes are also due to
almost nil export of CBU’s.
The parts manufactured by the
industry are mostly sheet metal
8 Auto Industry Development Programme
parts, wire-harnessing, interior trims,
seats, rubber and plastic parts,
batteries, wheel rims, tyres, lighting
accessories etc.
The vending industry has been faced
with challenges of availability of
local raw-materials, production
assets, sophisticated toolings
including dies & moulds, machining
facilities and trained & productive
workers, supervisory staff and the
management and absence of a
culture of research and
development. The technologies for
sophisticated components due to
high cost, royalties and license fee
etc., remained a barrier in their
acquisition.
In the competitive development
phase (2005 – 12), the vendors
besides the above challenges are
now faced with issues of prices,
quality and timely supplies. The
vendors under the deletion
programmes could not excel in
marketing skills due to inherent ease
provided by the old system. In the
development phase, the number of
vehicles will increase and so the
competition which will squeeze the
margins but certainly lead to high
volume of components for which
they will need capacity expansion,
efficient and highly productive
human resource, latest technologies
of parts and processes and mutual
support and complementation.
Increasing competition is expected
to lead to few consolidations and
mergers in the sector as mean and
lean production processes, just in
time supplies and high technology
production may also lead the
assemblers to decrease the number
 2 – Perspective of Pakistan Auto Industry

of vendors. The new environment trucks, tractors and buses registered

provides due tariff protection
against components coming from
more efficient economies.
Government’s approval of 5 years
pre-announced tariff will at least
help them focus on areas other than
the import tariffs which in the
preparation phase remained the
dominant policy tool.
2.3 Growth Drivers
Pakistan auto industry produced 1
million vehicles with a gross value
of around US$ 3.6 billion during the
year 2005-06. Pakistan is now
world’s 7th largest market of 2-
wheelers however, in value terms
the car production occupies over
50% of total market. The
production of vehicles expressed
compounded growth rate of 50%
for the period 2001-02 to 2005-06.
The cars, motorcycles, LCVs,
compound growth rate of 41%,
58%, 37%, 41%, 20% and (-7%)
respectively in the relevant period.
Among the leading factors to high
growth remained a regular increase
in purchasing power, easy
availability of auto financing,
favorable and consistent
government policies and increase in
the middle income population.
During the preparation phase, used
car imports also registered high
growth due to relaxation of import
regime. Government’s intervention
was owing to growing demand-
supply gaps which resulted in
delayed deliveries and high
premiums. A total of 64,764 used
and 14,363 new cars were imported
during the last 3 years. During the
same period 10,054 used trucks
were imported.

Installed Capacities and Production of Vehicles

Units in Nos
Products Installed Production
Capacities 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
Motorcycles 1,700,000 120,627 175,169 371,007 570,706 751,667 839,224
Cars 275,000 40,088 62,073 98,461 126,403 160,642 160,496
LCVs 40,000 9,055 12,548 14,896 25,177 32,053 38,490
Buses 5,000 1,086 1,296 1,380 1,762 825 1,053
Trucks 28,500 1,134 1,929 2,022 3,204 4,518 4,410
Tractors 65,000 23,801 26,240 35,770 43,200 48,887 54,098
Total 2,113,500 195,791 279,225 523,536 770,452 998,592 1,097,771
Source: PAMA

Auto Industry Development Programme 9

2 – Perspective of Pakistan Auto Industry
Consistent growth in economic
activity has put more pressure on
logistics and more so within the
larger cities. The production of
trucks & prime-movers despite a
large scale import of used dump
trucks, truck chasses and articulated
trucks speaks of growth potential in
this category. Pakistan road freight
caters nearly 96% of overland trade
traffic and with a growth in
industrial output, increasing land
trade with Afghanistan and China
and high activity in construction
sectors has actually lead to
shortages, particularly in the multi-
axle trucks and the prime-movers &
trailers.
This is anticipated that
government’s National Trade
Corridor Improvement Programme
(NTCIP) which has high priority
on the modernization of trucking
sector besides other infrastructure
projects will create more demand
for better quality trucks and prime-
movers. The government has
recently approved the Trucking
Policy prepared by the M/o IP&SI
which provides sustainable measures
for the Modernization of Trucking
Sector. Few of the known brands
such as HINO, DAEWOO, ISUZU
and KAMAS are already being
assembled. The NTCIP initiatives
emphasize on putting controls on
used and obsolete 2/3 axle trucks
and encouraging the multi-axle
trucks due to which the local
industry in the coming years will
have better utilization of
manufacturing capacity and
achieving the scales of production to
increase competitiveness.
10
The other star performer in the auto
industry besides cars & LCVs
remained the 2-wheelers. With the
increase in per capita income,
urbanization and availability of
cheaper 2-wheelers due to 45 to 50
assemblers establishing the
manufacturing during the last 4 to 5
years has made the 2-wheelers
affordable for the lower income
groups. The industry however, has
yet to innovate the features and
designs to enter into export markets.
The 2-wheelers nevertheless have
the highest local content i.e. 85% to
90%.
The tractor assemblers have shown
the real competitiveness in prices
and quality which is reflected from
marginal imports, despite being free
of import duty and sales tax. The
tractor competitiveness lies in the
indigenization of major components
and achieving the localization level
of nearly 90% in the tractors of upto
55 horsepower. The increasing
trend of mechanized farming,
growth in construction activity,
financial options on tractor
purchasing from financial
institutions, use of tractors as prime-
movers and export to Afghanistan
and few of the African countries has
led to continuous expansion in the
assembly and vending facilities. The
tractor production crossed 50,000
units mark during last year.
The total population of vehicles
including 2/3 wheelers reached to 7
million in the year 2005-06.The auto
sector employ’s 192,000 people
directly and around 1.2 million
indirectly and has Rs 98 billion of
investments and contributes Rs 63
billion as indirect tax in the national
Auto Industry Development Programme

tax revenues. Auto Sector remains
the second largest payer of indirect
taxes after the Petroleum Sector.
2.4 Growth Opportunities
In Pakistan context there are 10 cars
in 1,000 persons which is one of the
lowest in the emerging economies
which itself speaks of high potential
of growth in the auto sector and
more so in the car production.
Rising per capita income with
changing demographic distribution
and an anticipated influx of 30 to 40
million young people in the
economically active workforce in the
next few years provides a stimulus
to the industry to expand and grow.
• Auto sector contributes 16% to
the manufacturing sector which
is 19% of the total GDP. It is
expected that to increase to
around 25% in the next 5 to 7
years. Auto industry’s present
contribution to GDP stands at
2.8% which is expected to reach
5.6%. The GDP is expected to
grow from $145 billion to $210
billion by the year 2012.
• The government’s strong
commitment on investment in
the infrastructure projects
particularly the roads and
highways, ports and shipping
and Pakistan’s unique
geographical location, providing
an easy ground access to Central
Asian Republics, China,
Afghanistan, Iran and India is
expected to push the auto
industry growth in the cars,
LCVs and HCV sectors.
Auto Industry Development Programme
2 – Perspective of Pakistan Auto Industry
• The growth of auto component
industry is directly linked to the
growth in assembly sector. As
Pakistan auto industry is
expected to reach a critical mass
of production of cars and LCVs
within next 4 to 5 years, the
components production will
become more competitive,
technologically advanced and
taking its due share in the global
supply chain.
• Above factors in view and the
governments’ commitment to
create stable and predictable
policy environment, involving
the stakeholders in consultation
process, implementation and
assessment of policies will lead
to more investment, high
production, innovation and
competitiveness besides
maintaining the high growth of
recent years.
2.5 Safety, Quality & Standards and
Emission Control Policy
There are different laws and motor
vehicle acts to ensure the
roadworthiness of vehicles plying on
the roads. Section 39 of the Motor
Vehicles Ordinance 1965, and
Section 35 of The Motor Vehicle
Rules 1969, deals with the issue and
renewal of certificate of fitness.
Section 8 and Section 39 of MVR
1969; deal with issue of driving
license and issue of duplicate
certificate of registration and
certificate of fitness respectively.
Chapter 6 of MVR 1969 deals with
details of body construction,
essential equipment and
11
2 – Perspective of Pakistan Auto Industry
requirements of maintenance of a
motor vehicle.
The emphasis of these laws is clearly
on the management aspects and the
safe operation of the vehicles.
However, some sections deal with
the environmental aspects or the
emissions from the vehicles in a
rather general way. Sections 154,
158 deal with the horns and noise,
whereas section 163 deals with
emission of smoke vapor of grease.
The prohibition in these sections is
of a general nature and no standards
and testing procedures have been
specified.
On realizing the importance and
development of Metallurgy,
Standards, Testing and Quality
infrastructure, the government has
established Pakistan Standards and
Quality Control Authority by
merging the three organizations
namely Pakistan Standards
Institution (PSI), Central Testing
Laboratories (CTL) and Metal
Industry Research Development
Centre (MIRDC) by enactment
through Act No. VI of 1996.
Presently facilities and resources
available with PSQCA are
inadequate in relation to the duties
and responsibilities assigned to
them. PSQCA need to build up their
core competencies and to establish
links with the international
counterpart agencies to get
accreditation of its labs and
standards. There is also a need to
increase the skill level and capacity
of auditors and inspectors through
training and the capacity of
inspection and testing system by
12
enhancing the level of equipment
and professional education in the
present testing laboratories.
Auto Industry cannot make any
headway without the establishment
of strong standards and
accreditation within the country.
PSQCA has developed standards
only for the 2 wheelers so far.
There is need to develop standards
for rest of the vehicles produced
locally and for imports. PSQCA
need to invest heavily in establishing
infrastructure throughout the
country.
This is believed that old vehicles are
the gross polluters and can
contribute up to 80% of the
pollution load in the major cities.
The new vehicles with efficient
technologies even deteriorate rapidly
if not maintained properly. In order
to protect our environment from
this major source of pollution,
federal and provincial Governments
are needed to introduce, a system of
periodic fitness tests.
The Government has been
contemplating on Emission Control
Policy for the locally produced or
imported vehicles to become
EURO-2 compliant for the petrol
and diesel vehicles by the 1st July,
2008 and 1st July, 2009 respectively.
Industry fears that the diesel fuel
available in the country is not
environment friendly because of
high Sulfur and Benzene contents.
In order to achieve the goals,
Government may announce clear
time lines for its implementation
along with encouraging the use of
catalytic converters. Establishing the
Auto Industry Development Programme

requisite number of labs for
emissions testing and their
operations would be a challenging
task for relevant department.
2.6 Auto Sector Exports
Pakistan auto industry because of
the country location and a
diversified range of products and
particularly in the 2-wheelers, low
engine capacity and fuel efficient
cars & LCVs and tractors along with
auto components has the export
potential. The industry has been
barely meeting the local demand
while the increasing growth has
convinced the principals to expand.
The 2-wheelers have entered into
export market followed by tractors
though indirectly, and few models of
Suzuki Motor Car and components
are in the process of confirming the
export orders.
In the next phase, Pakistan auto
industry is expected to position itself
in the auto services and an attractive
out-sourcing hub for the
manufacturing of forgings, castings,
wire- harnessing and machining of
components. The AIDP has laid a
target of export of US$ 650 million
by the close of the year 2011-12.
Pakistan imported auto products
including CKD kits of a value of $
1.3 Billion during 2005-06. Earlier
while working on Vision 2012 for
the engineering sector, stakeholders
had vowed to make the Auto
Industry foreign exchange neutral by
the year 2012. Government will
continue facilitating the industry to
develop market and product know
how, industry participation in major
trade fairs, enabling fiscal policy,
Auto Industry Development Programme
2 – Perspective of Pakistan Auto Industry
capacity building and due
recognition to the exporters.
2.7 Challenges
The auto industry face the
challenges of developing products at
lower cost and achieving economies
of scale, development of technical
and human resource, stimulating
domestic demand, research and
development and exploiting the
international business opportunities.
Achieving these goals will rest on
reaching a critical mass of
production, high quality of products
and improved production
techniques through acquisition of
appropriate technologies,
development of safety and standards
and environment friendly vehicles.
The government role through a
stable and predictable policy
environment and ensuring
maximum participation of auto
industry in formulation,
implementation, assessment and
review of the policies however, will
remain a critical factor in the
sustainable development of auto
industry. The role of OEM’s in
acquiring technologies, developing
and improving the quality of
products for local fitment and
export will remain a crucial factor.
The development of infrastructure,
like roads, highways & bridges,
parking bays, ensuring the strict
implementation of traffic rules,
drivers training & licensing, effective
motor vehicle registration and
examination systems, necessary
amendment in Motor Vehicle Act
and compulsory insurance will
determine the efficient road map for
13
 2 – Perspective of Pakistan Auto Industry
sustainable development of auto
industry. The adoption of national
standards for quality, safety and
environment and their
implementation and enforcement in
the era of globalization and meeting
consumer’s expectations will remain
important obligations of
government and industry.
2.8 Auto Industry in Context to
Manufacturing Sector
The share of manufacturing sector
in GDP remains 19% which is low
as compared to competing countries
and the goals of job creation,
exports, research and development,
bringing innovations and
technologies will remain un-
attainable unless the manufacturing
culture is promoted. The share of
manufacturing to GDP has been
targeted as 30% by the year 2030.
While in manufacturing, shop floor
efficiencies count more in the
organic growth and sustainability of
industry. This comes from the
imaginative and skillful management
and highly trained and productive
workforce.
The investment in productive assets
and regular upgradation of the
existing facilities and reengineering
of manufacturing processes at the
shop floor to cut cost and minimize
wastages will remain a growing issue
for the industry. In the world
ranking Pakistan ranks 91 in global
competitiveness, 84 in quality
competitiveness, 67 in business
competitiveness and 99 in public
institution ranking. While the
technology index remains at 89. The
burden of government regulations
14
has however, come down to 55%
from 94% of an year ago.
Besides achieving competitiveness,
the major challenge faced by
industry is to go to export of
medium and high-tech products
which at present are not more than
14%. Hence it is imperative to
identify factors which are making
manufacturing in Pakistan less
competitive and to improve the
productivity at level and scale.
AIDP has been framed to address
the aforementioned challenges and
provide a stimulus to the
manufacturing sector in line with the
government’s vision. The following
issues nevertheless will remain
important for a competitive and
sustainable development of auto
industry;
i) The auto industry is generally
faced by multiplicity of taxes,
the presumptive tax regime has
led to increase in prices of
imported inputs and the finished
goods. Component
manufacturers are struggling to
compete with under-invoicing,
misdeclaration and smuggling.
Import of used parts is still
continuing at a large scale.
ii) Imposition of Federal Excise
Duty on the royalty and
technical fee remitted to the
suppliers of technology remains
a potential barrier to innovation.
iii) High cost of capital and
relatively difficult access for the
small and medium enterprises
and lack of any incentive in the
financial policy for the auto
Auto Industry Development Programme
 2 – Perspective of Pakistan Auto Industry
industry. Need of a dedicated
fund for technology and Human
Resource Development.
iv) Manufacturing of modern
machine tools and dies &
moulds and access to multi-axis
CNC machines from developed
world prevents high value
addition and development of
critical components.
v) Unpredictable demand and
absence of coherent supply side
measures to create sustainable
demand for auto products in the
backdrop of recent hike in
interest rates.
vi) Increasing cost of energy and its
unreliable and inconsistent
supply adds up the cost of
manufacturing and wastage of
resources. It is estimated that by
the year 2012, auto industry
consumption of electricity will
cross 500 – 600 MW from
around 250 - 300 MW, as of
now.
vii) To improve competitiveness,
government and industry’s high
focus is needed on investment in
**********
Auto Industry Development Programme
HRD, technology and
productive assets and supply
chain management.
viii) Benchmarking the performance
of industry against the world
practices, adopting best
manufacturing practices and
production techniques and
producing globally acceptable
quality products.
ix) Government to provide
incentives for the international
companies to bring their design
houses in Pakistan. Fiscal
support to establish testing
laboratories and evaluation
facilities and encouraging the
local manufacturers of 2 / 3
wheelers to design the vehicles
in the country is highly essential.
x) An all embracing and
consultative policy making with
elements of stability and
predictability through effective
participation of industry in the
policy formulation,
implementation and review
process.
15
16
Auto Industry Development
Programme (AIDP)
18
3
Auto Industry Development Programme (AIDP)
3.1 Need and Urgency of AIDP
Given its immense potential and
with a fairly large vendor base and
significant number of Original
Equipment Manufacturers (OEMs),
Pakistan’s auto sector needs to be
anchored with a firm & sustainable
policy regime determining its future
direction, prioritizing interventions,
delineating respective roles of
stakeholders and putting in place an
effective institutional mechanism for
a regular assessment and review.
Pakistan auto industry needs to
grow parallel with world industry
through concerted efforts to take
auto manufacturing to a self-
sustaining level where they shall
have volumes, generate requisite
technology and meet evolving
emission requirements. Moreover,
volume is important for automobile
sector, both for the manufacture of
vehicles as well as local development
of key components. Lack of volume
not only inhibits efficient
manufacture but also technology
and cost competitiveness. The
investment and fiscal policies should
create an environment for volume
production and indigenous
capability for innovation for small
cars and auto components.
Auto Industry Development Programme
Challenges posed by globalization,
liberalization and increasing
competition, demand an imminent
need to review the strategic
direction and policy framework for
sustainable growth of the domestic
automotive sector. This is crucial to
maintain the competitiveness of
participants in the automotive
sector, for them to be viable in the
long term.
The need for a development
programme for the auto industry
was realized at the time of
elimination of local content
conditions when the tariff policy has
been a major instrument to push for
the development of parts and
components locally alongside
encouraging the assembly of
vehicles. The industry while
embracing the TBS and entering in
the development phase was faced
with the issues of competitiveness,
productivity of level and scale, low
technology level, research and
development, supply chain and
human resource management. This
was coupled with the challenge of
continuing rapid growth phase of
last 5 to 6 years. The expectations
of the government on taking the
industry global and achieving the
scales in production and meeting the
objectives of job creation, skill
19
3 – Auto Industry Development Programme
development, investment and
stimulating the innovation without
any cogent plan, would have been
difficult to realize. Developing the
quality and safety standards and
producing environment friendly
vehicles, meeting the consumers’
expectations remains the
cornerstone of policy framework
which would be facilitated through
government intervention.
While formulating the AIDP
following objectives were agreed;
• Long term investment
• Encourage growth
• Promote domestic competition
• Enhance competitiveness
• Stimulate innovation
• Facilitate auto industry’s
integration into the global
supply chain
• The used vehicles import policy
will be regulated so as not to
impede the growth of the local
industry while protecting
consumer interest.
In developing the AIDP few
benchmarks were agreed with the
stakeholders, which would lead the
government to extend necessary
facilitation and the industry to
accept challenges of modernization
and competitiveness.
20
The non-tariff part of AIDP
comprises of the following schemes;
Human Resource Development
(HRD)
• Productive Asset Investment
Incentive (PAII)
• Technology Acquisition Support
Scheme (TASS)
• Auto Cluster Development
• Auto Industry Investment Policy
(AIIP)
• Auto Industry Development
Committee (AIDC)
The necessary framework for the
above schemes has been developed
and will be implemented through
the AIDC which will conduct
necessary verifications, certifications
and would determine the eligibility
of an entity for its entitlement to
incentives.
AIDP encourages the companies to
corporatize its affairs and to make
their accounts transparent as certain
incentives would be allowed only if
the investment or technology
acquisition has been duly capitalized
in their financial statements. In the
modern world, open companies
attract more investment, strategic
partners and global customers for its
products. This intervention is
expected to promote a culture and
create an urge on the part of
companies to become big and go
global
Auto Industry Development Programme
 3 – Auto Industry Development Programme

Projections
2005-06 2011-12
Cars (Nos) 161,000 500,000
Motorcycles (Nos) 751,667 1.7 Million
Investment (Rs. Billion) 98 225
Contribution to GDP (%) 2.8 5.6
Contribution to Manufacturing Sector (%) 16 25
Contribution to indirect taxes (Rs. Billion) 63 190
Gross Sales Turnover (Rs. Billion) 214 600
Direct employment (Nos) 192,000 250,000
Exports (US$ Million) 35 650 (350 for components
and 300 CBU)

**********

Auto Industry Development Programme 21

22
Five Year Tariff Plan
24
 4
Five Year Tariff Plan

To achieve the laid down objectives
of AIDP, government appreciated
the need of predictable and stable
tariff environment owing to a long
gestation period for the investment
to start giving returns and that
vendors capacity development is
time taking and investments can
only take place once there is an
element of certainty, predictability
and consistency in the policies. A
predictable environment is also
essential for the development of
critical components, technology
transfer and to achieve the goals of
exports. With these objectives in
view, government undertook a
lengthy consultation process with
the industry and kept the ground
realities in view, predominantly the
bare minimum protection,
competition and the global
environment of the automotive
sector. Finally a five year tariff plan
covering the import duties for the
entire automotive sector and
including the components, CKD
kits and CBU’s were approved by
the government at the time of
budget 2007-08.

Five Year Tariff Plan for Auto Sector

S# DESCRIPTION Rate of Duty
2007-08 2008-09 2009-10 2010-11 2011-12
(1) (2) (3) (4) (5) (6) (7)
(A) Prime Movers falling under HS
Code 8701
1. Completely built up (below 280 HP) 30% 30% 30% 30% 30%
2. Components for assembly of prime 10% 10% 10% 10% 10%
movers (below 280HP) other than those at
Sr. No 3 below
3. Components for assembly of prime 35% 35% 35% 35% 35%
movers (below 280 HP) as are listed in
SRO 693(I)/2006 dated 01-07-2006
4. Completely built up (above 280 HP) 15% 15% 15% 15% 15%
5. Components for assembly of prime 0% 0% 0% 0% 0%
movers (above 280HP) other than those at
Sr. No 6 below
6. Components for assembly of prime 35% 35% 35% 35% 35%

Auto Industry Development Programme 25

 4 – Five Year Tariff Plan

S# DESCRIPTION Rate of Duty

2007-08 2008-09 2009-10 2010-11 2011-12
(1) (2) (3) (4) (5) (6) (7)
movers (above 280 HP) as are listed in
SRO 693(I)/2006 dated 01-07-2006
(B) Agriculture Tractors falling under
HS Code 8701
7. Completely built up 0% 10% 10% 10% 10%
8. Components for assembly of agriculture 0% 0% 0% 0% 0%
tractors other than those at Sr. No 9 below
9. Components for assembly of agriculture 35% 35% 35% 35% 35%
tractors as are listed in SRO 693(I)/2006
dated 01-07-2006
(C) Buses falling under HS Code 8702
10. Completely built up (Non-CNG) 20% 20% 20% 20% 20%
11. Components for assembly of buses (Non – 5% 5% 5% 5% 5%
CNG) other than those at Sr. No 12 below
12. Components for assembly of buses (Non- 35% 35% 35% 35% 35%
CNG) as are listed in SRO 693(I)/2006
dated 01-07-2006
13. Completely built up (CNG / LPG 15% 15% 15% 15% 15%
dedicated)
14. Components for assembly of buses (CNG 0% 0% 0% 0% 0%
/ LPG dedicated) other than those at Sr.
No 15 below
15. Components for assembly of buses (CNG 35% 35% 35% 35% 35%
/ LPG dedicated) as are listed in SRO
693(I)/2006 dated 01-07-2006
(D) Cars /Jeeps falling under HS Code
8703
16. Completely built up of a cylinder capacity 50% 50% 50% 50% 50%
not exceeding 800 cc
17. Completely built up of cylinder capacity 55% 55% 55% 55% 55%
exceeding 800 cc but not exceeding 1000
cc
18. Completely built up of cylinder capacity 60% 60% 55% 55% 55%
exceeding 1000 cc but not exceeding 1500
cc
19. Completely built up of cylinder capacity 75% 75% 70% 70% 70%
exceeding 1500 cc but not exceeding 1800
cc
20. Completely built up of cylinder capacity 90% 90% 85% 85% 85%
exceeding 1800 cc
21. Components for assembly of cars other 35% 32.5% 32.5% 30% 30%
than those at Sr. No 22 below

26 Auto Industry Development Programme

 4 – Five Year Tariff Plan

S# DESCRIPTION Rate of Duty

2007-08 2008-09 2009-10 2010-11 2011-12
(1) (2) (3) (4) (5) (6) (7)
22. Components for assembly of cars as are 50% 50% 47.5% 45% 45%
listed in SRO 693(I)/2006 dated 01-07-
2006
(E) Assemblies for the Manufacture of
Cars 8703 / LCVs 8704
23. Alternator, Starter Motor, Water Pump, 35% 35% 50% 50% 50%
Fuel Pump, Fuel Filter, Seat Recliner, Air
Cleaner Assembly
24. Power Steering, Engines, Transmissions 35% 35% 35% 50% 50%
(F) LCVs (up to 5 Tons) falling under
HS Code 8704
25. Completely built up (up to 5 tons) 60% 60% 60% 60% 60%
26. Components for assembly of LCVs (up to 20% 20% 20% 20% 20%
5 tons) other than those at Sr. No 27
below
27. Components for assembly of LCVs (up to 50% 50% 47.5% 45% 45%
5 tons) as are listed in SRO 693(I)/2006
dated 01-07-2006
(G) Rigid Trucks falling under HS
Code 8704
28. Completely built up 30% 30% 30% 30% 30%
29. Components for assembly of rigid trucks 10% 10% 10% 10% 10%
other than those at Sr. No 30 below
30. Components for assembly of rigid trucks 35% 35% 35% 35% 35%
as are listed in SRO 693(I)/2006 dated 01-
07-2006
(H) Motorcycles falling under HS Code
8711
31. Completely built up 80% 70% 65% 60% 60%
32. Components for assembly of Motorcycles 25% 20% 15% 12.5% 10%
other than those at Sr. No 33 below
33. Components for assembly of Motorcycles 50% 50% 47.5% 45% 45%
as are listed in SRO 693(I)/2006 dated 01-
07-2006
(I) Components and Assemblies for the
Manufacture of Motorcycles 8711
34. Regulator Rectifier, Ignition Coil 25% 50% 47.5% 45% 45%
35. Piston, Fuel Cock, Clutch Assembly, 25% 20% 47.5% 45% 45%
Sprocket Cam
36. Drum Gear Shift, Magneto, Oil Pump 25% 20% 15% 45% 45%
(J) Trailers falling under HS Code 8716

Auto Industry Development Programme 27

 4 – Five Year Tariff Plan
S# DESCRIPTION
2007-08 2008-09 2009-10 2010-11
(1) (2)
37. Completely built up
38. Components for assembly of trailers
Earlier, while switching over to TBS
around 416 new tariff lines were
created for the parts and
components which were subjected
to the duties agreed with the
stakeholders after negotiations of
over 2 to 3 years. The total tariff
lines covering the entire auto sector
therefore comes to around 480 and
which constitute nearly 7% of total
tariff lines.
Pakistan is currently negotiating
FTAs and PTAs with several
countries and regions and few of the
FTAs are already in place such as
SAFTA and FTA’s with Sri Lanka,
China and Mauritius. The recently
negotiated FTAs with Malaysia and
on going negotiations with
Singapore and Thailand exclude
these tariff lines from duty cut. As
**********
28
Rate of Duty
2011-12
(3) (4) (5) (6) (7)
15% 15% 15% 15% 15%
5% 5% 5% 5% 5%
such all these tariff lines are on the
sensitive list. The government
strongly feels that auto industry
which is in the development phase
and which otherwise is contributing
a lot in job creation, investment and
development of critical mass of
technologies, and providing a base
for other industries cannot compete,
as the grounds are not even in the
regional context.
In view of Government’s strong
expectations that industry will
position itself as a developed
industry by at least 2012, may lead
to a comprehensive review of its
tariff policy. The industry by then
would need a fair competition with
at least the regional players.
.
Auto Industry Development Programme
 Human Resource
Development (HRD)
30
5
Human Resource Development (HRD)
The rapid growth in Auto Sector is
difficult to sustain without efficient
human resource. Presently the
industry is faced with the acute
shortage of trained engineers,
supervisors and workers at the level
of assembly operations as well as
parts manufacturing. The deficiency
of skilled personnel is more on
account of rapid growth of the Auto
Sector during the last 6 to 7 years.
High defect rate, low innovations,
delayed supplies and quality issues
are more on account of weaker
human resource than to any other
factor. Where the top management
in the small to medium entities lacks
the overall business management
skills, the engineers produced by the
universities seriously lack analytical
skills and a thinking mind. While
the workers with generally low
educational background and a fixed
mind set leads to low productivity
and poor quality. There has
generally been low focus on human
resource development mainly due to
5.1
poor skill level at the higher level
within the entities and more so in
the parts manufacturing sector. The
available training programmes/
courses have not been able to bring
significant change in the mind-set
Auto Industry Development Programme
and attitude of workforce at any
level within the entities.
The industry rather needs a focused
and specialized effort through
dedicated institutions which may be
called the “Centres of Excellence”
purely for the training of manpower
and management for the Auto
Sector. This however, would need
the training programmes of
reasonable duration besides the
short courses/ programmes. Such
dedicated institutions through close
collaboration with the established
institutions in the country such as
HEC, NAVTEC, VTCs,
Polytechnics, TUSDEC, and
management schools looks the only
viable solution to steer the Auto
Industry on the rapid growth path.
There is an urgent need to develop
competitive and multi-skilled people
through cultural change by
imparting extensive training through
the centres of excellence.
Mission Statement
“To set-up a system to develop on a
sustainable bases, competent and
multi-skilled personnel to meet the
growing needs of Auto Industry”.
31
 5 - Human Resource Development

.5.2 Situation Analysis

Matric with
Science

• Vehicle/ Inspection & Testing

5.3 Identification of Required Skills Supervision
5.3.1 Component Manufacturing Skills • Process / Quality Control
• Metal • Supervision.
o Die-casting (Aluminum & Iron).
5.3.3 Vehicle Maintenance Skills
o Sand Casting
o Non-Ferrous Gravity Casting • Diagnostic
o Forging • Repair
o Machining • Maintenance
o Sheet Metal • Supervision
• Plastic Products Production
5.4 Subjects
• Rubber Products Production
• Electrical Parts Production 5.4.1 Production Shop Floor
• Die, mould, jigs and fixtures • Work values
designing & manufacturing • English
• Plating of Surfaces • Applied mathematics
• Die and Equipment Maintenance • Applied Physics
• Process / Quality Control • I.C. Engine (Level-I)
• Supervision • Engineering Drawing
5.3.2 Assembly Shop Floor Skills • Electronic Controls of Machine
• Mig Welding • Heat Treatment
• Spot Welding • Welding
• Painting & Surface Treatment • Painting
• Assembly Tool Usage • Hand & Assy Tools Usage

32 Auto Industry Development Programme

 5 – Human Resource Development

• Process / Quality Control innovative development has been

Techniques due to rigid attitudes and mind-set
• Supervision Techniques for the supervisory and workers. To
• Kaizen bring a change in mind-set and work
ethics in the existing workforce
• Machining incl CNC.
would not be impossible, albeit
• Die-Casting (Al & Fe) slow. However, putting the new
• Sand Casting Only two in any one centre entries to comprehensive
• Non-Ferrous Gravity programmes would be more
Casting productive and sustainable. The
• Forging duration of such academic
programmes including the
5.4.2 Vehicle Diagnostic Maintenance attachment of trainees to the parts
& Repair manufacturers and assemblers for a
• Work Values fixed duration would undoubtedly
• English be a potential success. The concept
• Applied Mathematics will work on the basis of medical
• Applied Physics schools training with compulsory
• I.C. Engine (Level I & II). house job.
• Automotive Electrics & Electronics. The duration of such training
• Engineering Drawing programmes have been envisaged as
• Workshop Practices including under:-
Welding i) 12 months (Certificate
• Heat Treatment Programme)
• CAD ii) 24 months (Diploma)
• Instruments iii) Short Courses (various duration)
• Transmission (Manual & The concept remains that most of
Automatic) the trainers would be boarders so
• Fuel Injection & Carburetion. that they could live and breathe in
• Motor Vehicle Inspection an atmosphere which could bring a
• Body Building cultural change which is essential for
• Breaks & Suspension achieving quality levels
commensurating the industry needs.
• Safety in Vehicle maintenance
• Car Air-conditioning 5.5 Faculty
• Painting, surface treatment & • Both foreign and local experts with
beautification extensive working experience and
• Kaizen academic qualifications.
• Management & logistics of • To attract the foreign experts to
maintenance in Automotive vehicles fulfill the local training needs and
particularly for their long duration
It is realized that the human stay in the country, this is envisaged
resource constraints faced by Auto to give them a status of a privileged
Industry for its sustainable and

Auto Industry Development Programme 33

 5 - Human Resource Development

person with certain immunities from the auto industry are envisaged one
income tax. each at Karachi and Lahore. The
overall management of these centres
5.6 Auto Industry Skill Development of excellence will come under the
Company (AISDC) AISDC.
i) Automotive Testing & Training
To steer the initiative on HRD on
Centre Ltd (AT&TC), Karachi
sustainable basis, setting up of
ii) Pak German Auto Training &
AISDC is envisaged. The company
Testing Institute, Lahore
will be established under The
(Spinning Machinery
Companies Ordinance and will be
Corporation)
managed by a Board with
representatives from industry, HEC, The trainees of Balochistan,
NAVTEC, and management N.W.F.P, interior Sindh and
schools. The company will Southern Punjab will get
collaborate with the envisaged scholarships for various courses.
AIDC to identify the needs and The project proposals for the up-
synergies for an effective HRD. gradation of the centres of
excellence will be submitted to the
5.7 Automotive Centres of
government by the AISDC
Excellence
subsequently. The seed money to
Two centres of excellence for the establish the AISDC will be
development of human resource of provided by PIDC.

**********

34 Auto Industry Development Programme

 Productive Asset
Investment Incentive
(PAII)
36
6
Productive Asset Investment Incentive (PAII)

locally, high value added

Productive Asset Investment components and assemblies which
Incentive (PAII) is expected to have been planned by the industry
stimulate the investments in the for local development would need
production capacities of auto parts investments. Such components and
manufacturing and to optimally assemblies include Alternator,
utilize such capacities through Starter Motor, Water Pump, Fuel
supply of output to the vehicle Pump, Fuel Filter, Seat
assemblers in the country. PAII is Reclining, Power Steering,
to essentially bring competitiveness Engines, Transmissions for car
in the vehicle manufacturing and LCVs and Regulator
without disturbing the pre- Rectifiers, Ignition Coils, Piston,
announced tariffs which provide due Fuel Cock, Clutch Assembly,
protection to the locally Sprocket Cam, Drum Gear Shift,
manufactured auto parts. Offsetting Magneto and Oil Pump etc for 2 /
the duty on import of CKD kits, 3 wheelers.
which has been kept high based on
the popular demand of industry to 6.1 Objectives
keep potential of further localization
alive, will work through acquiring The benefits of this scheme would
credits by the parts manufacturers be allowed to the auto parts
on their investments in the manufacturers with the following
productive assets. PAII is also objectives:-
expected to lure the foreign i) To expand and modernize
component manufacturers to start capacities in auto parts
production in Pakistan and further manufacturing.
creating the interdependence ii) To encourage localization of
between the assemblers and the auto parts for the local
parts manufacturers which is a pre- production of vehicles and for
requisite for competitiveness, export.
innovation and quality iii) To encourage development of
improvement. The competitiveness critical components and achieve
thus acquired will help taking the competitiveness.
locally produced parts and vehicles iv) To promote interdependence
to the global markets. between assemblers and auto
parts manufacturers.
In addition to the components
which have already been developed

Auto Industry Development Programme 37

 6 – Productive Asset Investment Incentive
6.2 Incentives
i) PAII will be in the form of
customs duty credit equal to a
certain percentage of the value
of productive assets installed by
the eligible auto parts
manufacturers. The duty credit
so acquired will be spread
equally over a period of 5 years
to offset duty on eligible
imports.
ii) The duty credit will be
transferable to vehicle
assemblers and will remain non-
trade-able in the open market.
iii) Duty credits so earned would be
allowed to offset import of
inputs and further productive
assets by a parts manufacturer or
by assemblers against import of
CKD kits and toolings.
6.3 Eligible Entities
The entities fulfilling the following
criterion will be considered eligible
to avail the incentive under PAII:-
i) The auto parts manufacturers
must be supplying or contracted
to supply to the recognized
vehicle assemblers or export
market.
ii) The assemblers of vehicles will
be allowed the benefit to the
extent of in-house parts
manufacturing only.
iii) Must be registered with the sales
tax department.
iv) Must be a limited liability
company.
38
v) Having suitable in-house
facilities to manufacture auto
parts.
vi) The company offering itself for
full disclosure and detailed
scrutiny at any time during the
currency of scheme
6.4 Qualifying Productive Assets
Qualifying assets under PAII
includes jigs, dies & moulds,
production testing equipment, heat
treatment facility, etc, and other
productive assets as determined by
the AIDC (excluding land, buildings,
transport assets, software, office
equipment etc.). Only the new
productive assets would be eligible
for the incentive under PAII.
6.5 Qualifying Value of Assets
The qualifying value of productive
assets means the value of the
productive assets capitalized in the
balance sheet of the claimant
according to the accepted
accounting practices. The installed
assets will have a recognized
marking which will be duly entered
in the asset register kept in the
premises of the auto part
manufacturer. For the purpose of
eligibility under PAII, the minimum
value of productive assets in one
financial year will not be less than
Rs. 5 million in the case of existing
parts manufactures and Rs. 10
million in the case of new set ups.
6.6 Documentation
The auto parts manufacturers while
making claims under the PAII will
Auto Industry Development Programme

submit a business plan to the EDB
as to whether and to what extent;
i) Total production will increase
substantially over a period of
two years from the
commencement of production.
ii) A contract has been / will be
awarded or a letter of intent has
been received for the
manufacture of auto parts for
supply to assemblers.
iii) International competitiveness
will be improved.
iv) The investment will contribute
to employment and technology
enhancement.
v) Value of local content will
increase.
vi) Consumer interest will be
supported.
vii) Net foreign currency usage will
be reduced.
viii) The investment will provide for
high standard production
facilities to produce auto parts
to the quality standards required
for the export.
ix) Each page as well as separate
pages of application must be
initialed. Applicant will also
submit the financial statements
including income statement,
balance sheet of recent year and
of the last two years.
Declaration on the last page of
application must be signed by an
authorized director of company.
x) A detailed marketing and sales
plan, a production plan, budget
and financial statements for the
project for a period of three
years, as well as the most recent
company statement will be
submitted as part of the business
plan.
Auto Industry Development Programme
6 – Productive Asset Investment Incentive
6.7 Claims for PAII
i) The claims for the PAII must be
lodged by an entity through an
Accredited Accounting Firm
which should be amongst the
top 30 companies in the ranking
list of State Bank of Pakistan.
ii) A detailed factory layout, clearly
showing the productive assets
installed must be included in the
claim, for technical assessment
by the EDB, including the site
inspection.
iii) Each asset must be provided
with a unique asset number that
must be affixed or engraved on
the asset installed wherever
possible.
iv) A claimant may submit one
claim within six months from
the closure of its financial year,
for all qualifying assets that were
taken up in its asset register
during that financial year. Unless
written authorization from
AIDC is obtained, late claims
will not be entertained.
v) A comparison between the
actual achievement and the
information in the approved
application and business plan,
and previous years’ claims on
the project as applicable, must
be submitted with the claims.
vi) The claim must be signed by the
authorized person of the board
of directors of the company.
vii) All claims must be audited by
external auditors before
submission to EDB.
viii)The claims also include a
schedule of previously
authorized productive assets
which were taken into the asset
register with their asset
39
 6 – Productive Asset Investment Incentive
numbers, capitalization values,
date of acquisition, date of
production of each asset, or
expected date of production,
along with the report from
qualified independent auditors.
ix) EDB reserves the right to have
an independent audit done in
respect of the financial
statements that substantiate the
claim for PAII.
x) Claims must be submitted to:
Chief Executive Officer,
Engineering Development
Board (EDB),
Ministry of Industries,
Production and Special
Initiatives, SEDC (STP)
Building, 5-A, Constitution
Avenue, Islamabad.
6.8 Ceding of PAII Credit
Certificates to OEMs
Auto parts manufacturers will be
allowed to transfer or cede their
PAII credit certificates thereof, only
to the assemblers with the approval
of AIDC. Assemblers will be eligible
to use duty credits so obtained to
off set duty on import of CKD kits
and toolings.
6.9 Procedure of Transfer of PAII
Credit Certificates
An auto parts manufacturer will
submit an application to the EDB to
get the permission to transfer PAII
credit certificate to an assembler.
The application will indicate the
following;
i) The amount in Rupees of total
duty credit intended to cede.
ii) Copy of agreement for sale of
auto parts produced by him for
40
certain period of time in lieu of
transfer of duty credit to the
assemblers.
iii) The assembler receiving such
duty credits will provide
information on the
competitiveness and price
benefits for the vehicles as a
result of such credits.
6.10 Processing of Claims
An assessment committee of the
AIDC after scrutiny and verification
of such claims placed before it will
recommend the case on the basis of
merits to EDB for crediting of duty
credit in the balance of claimant.
EDB, based on the
recommendations of AIDC will
then forward the case to FBR for
the benefit under this scheme.
6.11 Claims for Subsequent Year’s
PAII Credit Certificate
For the release of ongoing PAII
credit certificates (i.e. the balance of
certificates after the first year’s 5%
of claimed and capitalized
investment) subsequent claims must
be submitted. The subsequent
claims must have the following
detailed information.
i) The claimants must provide an
updated business plan with any
change in the ownership or legal
status of the company
ii) The claimant must confirm that
the qualifying assets contained in
the asset list on which the duty
certificates for the PAII were
based are still reflected in the
asset register and balance sheet
of the claimant.
Auto Industry Development Programme

iii) The claimant must provide
information on any change in
the manner of use or purpose of
use of qualifying assets, as well
as the resulting financial
implications.
iv) Material deviations from the
approved business plan are to be
pointed out and motivated.
v) The claimant must provide
copies of its most recent
financial statements.
vi) Each page of the application as
well as all separate pages
attached to the application must
be initialed by the authorized
person of board of directors of
the company. In addition, the
authorized person must sign a
declaration to be included on
the last page of the claim. A
certificate of authorization
signed by the directors of the
company is also submitted with
the claim.
vii) Claims have to be submitted by
30th June of each calendar year
in order to qualify for issuing of
that year’s certificates. Claims
submitted later may not be
considered except the prior
approval of AIDC.
viii) Claims must be submitted to:
The Chief Executive Officer,
Engineering Development
Board (EDB),
Ministry of Industries,
Production and Special
Initiatives
SEDC (STP) Building, 5-A,
Constitution Avenue,
Islamabad
EDB after the approval of AIDC
will submit these claims to FBR for
the benefit.
**********
Auto Industry Development Programme
6 – Productive Asset Investment Incentive
6.12 Assessment and Review of PAII
EDB will provide to AIDC, a
summary of productive assets
invested, by different auto parts
manufacturers, duty credits earned
and such credits utilized by the
beneficiaries, on annual basis.
Assessment and review will take
place by the end of each year, up to
year 5 to assess the effectiveness of
PAII as an industry development
instrument. Comprehensive review
will be conducted at the conclusion
of 5th year. AIDC based on the
performance may recommend the
continuation of PAII scheme
beyond five years.
6.13 Withdrawal of PAII Credit
Certificates
EDB reserves the right to withdraw
the PAII with retrospective effect
for non-performance. EDB also has
the right to withdraw the benefits of
PAII, if any irregularities have been
observed or incorrect information
was furnished with regard to the
obtaining or utilization of the
certificate pending the outcome of
any civil, legal or criminal
proceedings against the beneficiary.
In such an event, if beneficiary is
being deregistered or if the
unutilized portion of a certificate is
withdrawn in terms of this
paragraph, any benefit obtained as a
result of such certificate shall
become repayable on demand to the
government. The clauses of the
general clauses Act shall be applied
in such cases.
41
42
Technology Acquisition
Support Scheme (TASS)
44
7
Technology Acquisition Support Scheme (TASS)
Technology levels remain low to
medium in the auto parts
manufacturing primarily due to high
cost of technology acquisition.
Automotive industry has seen a
considerable growth but most of the
parts manufacturers are still using
old manufacturing methods. With
such low technology levels,
competitive production at high
volumes and entering into export
markets is a difficult task.
Development of critical parts
involving high technology level
appears a distant possibility.
Without a comprehensive spectrum
of technology being available, the
industry will be on slippery grounds.
TASS is envisaged to overcome
these shortcomings and facilitate the
acquisition of critical technologies.
To further improve the quality of
components which have already
been developed and to go for high
value added components and
assemblies which have been planned
by the industry for local
development would need high
technologies. Such components and
assemblies include Alternator,
Starter Motor, Water Pump, Fuel
Pump, Fuel Filter, Seat
Reclining, Power Steering,
Engines, Transmissions for car
and LCVs and Regulator
Rectifiers, Ignition Coils, Piston,
Auto Industry Development Programme
Fuel Cock, Clutch Assembly,
Sprocket Cam, Drum Gear Shift,
Magneto and Oil Pump etc for 2 /
3 wheelers.
Technology is acquired in various
forms from the global suppliers,
most commonly being through
licensing, patents, registered designs,
manufacturing rights, quality
improvement agreements, technical
support and training etc. The
objectives are to either develop new
products, improve the quality of
present products, manufacturing
processes or performance
enhancement. In the emerging
scenario, there is a priority to
produce fuel efficient vehicles made
of lighter materials and which are
environment friendly at the lowest
possible cost. Pakistan auto industry
is not equipped to under take
research and development due to
relatively weak technical base, low
volume production and risk
aversiveness of producers and
therefore relying on acquisition of
latest technologies directly or as
produced by the principals.
Technology leads to innovations
and competitiveness. Technology
acquisition costs vary with type and
extent of sophistication. Cutting
edge technology transfers are
difficult and cost may be the main
factor.
45
 7 – Technology Acquisition Support Scheme
Existing products need technology
upgradation to improve
performance, efficiency and quality .
Technology development has been
slow in Pakistan especially in the
auto parts sector as local companies
(mostly SMEs) are unable to afford
it. An impressive growth in
automobile production and a
strategic thrust towards local value
addition to achieve competitiveness
necessitate support by the
government through matching
grants.
TASS will support the efforts of
auto parts manufacturers through
matching grants to enhance their
technology levels and encourage
localisation. This scheme is an
integral part of the AIDP being
implemented by the Government of
Pakistan
TASS will not be admissible to the
import of physical productive assets
as these are being dealt under a
separate scheme.
7.1 Eligible Entities
The entities which fulfill the
following criterion will be
considered eligible to avail the
support under this scheme:-
i) The auto part manufacturers
must be supplying or contracted
to supply to the vehicle
assemblers or export market.
ii) Must be registered with the sales
tax department.
iii) Having suitable in-house
facilities to manufacture auto
parts.
46
iv) Must be a limited liability
company.
v) The company offering itself for
full disclosure and detailed
scrutiny at any time during the
currency of the scheme.
7.2 Eligibility Criterion
Following are the eligible criterion
under this scheme:-
i) Procurement of technologies
through licensing.
ii) Technology to be acquired
includes design, manufacturing
know how, technical support,
quality improvement and
training.
iii) Procurement of patents or
manufacturing rights and
registered design.
iv) In the case of a joint venture
(JV), if the technology is not the
equity for the purpose of
technology acquisition support.
7.3 Assessment Criterion
Each project will be ranked by the
Assessment Committee of the
AIDC on the following merit
criterion.
i) The application for claim of
technology expenditure will be
accompanied with a detailed
business plan covering details of
Technology Acquisition,
technical merits of project,
environment benefit, benefit to
the entity and the community.
ii) Business Plan will also include a
commitment to the sustainability
of internationally competitive
Auto Industry in Pakistan
Auto Industry Development Programme
 7 – Technology Acquisition Support Scheme
through Technology
Acquisition.
iii) This will also include a
commitment to increase the
value of local content and
production of CBU’s and
components of quality standards
required for export.
iv) Priority will be given to projects
bringing in new technologies to
develop parts traditionally on
category C of the defunct
deletion programs.
v) Any other criteria that the
committee will decide after the
approval of EDB board.
7.4 Administration of the TASS
AIDC will undertake detailed
assessment of the application,
documentation, business plan and
the performance of participating
auto parts manufacturers. AIDC will
also provide advice on project
performance and may make
recommendations to the EDB for
matching grants or otherwise.
7.5 Documentation
All the auto parts manufacturers
who wish to apply for technology
acquisition matching grants under
this scheme will be required to
complete and lodge an application
on the prescribed format along with
the detailed business plan.
Following documents have been
prescribed for submission of
application to the EDB, under the
scheme.
i) Detailed business plan as to
what and to which extent
technology acquisition will lead
Auto Industry Development Programme
to improvement of localization
and/or competitive and
innovative production of CBU’s
or components. The business
plan will also provide the
estimates on product
development, local content,
consumer interest, standards,
production information,
marketing strategy, exports,
employment & training, and
financial projections on
technology enhancement.
ii) A copy of agreement containing
details of technology provider /
seller and type and kind of
technology and payment made
to the seller of technology,
details of terms and conditions,
payment procedure, mode of
payment and copy of invoice.
Details, if any of this being
propriety technology be
included.
iii) Each page as well as separate
pages of application must be
initialed. Claimant will also
submit the financial statements
including income statement,
balance sheet of recent year and
of the last two years.
Declaration on the last page of
application must be signed by an
authorized director of company.
The application should contain
details of expenditure on
technology acquisition.
iv) A detailed marketing and sales
plan, a production plan, budget
and financial statements for the
project for a period of three
years, as well as the most recent
company statement will be
47
 7 – Technology Acquisition Support Scheme
submitted as part of the business
plan.
7.6 Claims for TASS
i) The claims for matching grant
must be lodged by an accredited
Accounting Firm, on behalf of
the beneficiary, who will take
responsibility of information so
provided. Accounting firm
should be amongst the top 30
companies in the ranking list of
State Bank of Pakistan. The
applicant will also submit an
undertaking that technology
acquisition expenditure incurred
will be capitalized in his balance
sheet, as a capital expenditure
for that year.
ii) A detailed factory layout, clearly
showing the in house machinery
and equipment must be included
in the claim for technical
assessment including the site
inspection.
iii) A claimant may submit the claim
within six months from closure
of its financial year, for all
technology acquisition
expenditures that were taken up
in that financial year. Unless
written authorization from
AIDC, late claims will not be
entertained.
iv) All claims must be audited by
recognized external auditors.
And claims must be signed by
the authorized person of the
board of directors of the
company.
v) EDB reserves the right to have
an independent audit/inspection
done in respect of the financial
48
statements that substantiate the
claim for TASS.
vi) Claims must be submitted to:
Chief Executive Officer,
Engineering Development
Board,
Ministry of Industries,
Production and Special
Initiatives, Islamabad
Assessment Committee of the
AIDC may recommend or reject
these claims and may approve the
claims provisionally. The provisional
approval however, will be finalized
once documents and physical
assessment wherever necessary is
completed.
EDB, based on fulfilling all the
qualifying criterion and the merit
criterion of the assessment panel of
AIDC will consider the case for
further action.
7.7 Assessment and Review of TASS
EDB will provide to AIDC, a
summary of technology acquisition,
matching grants recommended/
availed by different auto parts
manufacturers, on annual basis.
Assessment and review will continue
annually and up to 5 years to assess
the effectiveness of scheme under
AIDP. Comprehensive review will
be conducted at the conclusion of
5th year. AIDC based on the
performance of the scheme may
recommend the continuation of
scheme beyond five years.
Auto Industry Development Programme
 7 – Technology Acquisition Support Scheme

pending the outcome of any civil,

7.8 Withdrawal of Technology legal or criminal proceedings against
Acquisition Matchmaking Grants the claimant, in such an event, if
claimant or beneficiary is being
EDB reserves the right to withdraw
deregistered or if the unutilized
the technology acquisition matching
portion of a grant / tax concessions
grants so availed with retrospective
is withdrawn in terms of this
effect, if the information and
paragraph, any benefit obtained as a
evidence provided by claimant
result of such scheme shall become
found untrue. If any irregularities
repayable on demand to the
have been observed or incorrect
government. The clauses of the
information was furnished with
general clauses Act shall be applied
regards to the obtaining or
in such cases.
utilization of the matching grants

**********

Auto Industry Development Programme 49

50
Auto Cluster Development

51
52
8
Auto Cluster Development
The assemblers of vehicles are
mostly located in and around
Karachi and Lahore. The car and
HCV assembly is mostly based in
Karachi while the 2-Wheelers/ 3-
Wheelers and agricultural tractors
are located in Lahore. The same is
the case with the vendors of such
vehicles except that many vendors
of car/ LCV are based in Lahore as
well. The vehicle assemblers play a
pivotal role in development of
vendors through knowledge
transfer, supply chain management,
products and processes
development. The way the Auto
Industry is becoming highly
competitive world over and in
Pakistan, focus has been shifted to
not carry the cost of inventory and
to supply on “Just in Time”
concept.
Fragmented location of vendors and
a general lack of mutual support and
learning and sharing certain
common but otherwise under
utilized capacities remain the issues
which could be addressed through
Cluster Development.
The high growth in Auto Sector in
recent years and the projections
Auto Industry Development Programme
thereof involves increase in parts
manufacturing capacities, potential
JVs with the foreign vendors and
exports through supply chain
management, efficient
communication and mutual support
of the vendors.
While an increasing interest of
foreign companies to start assembly
in Pakistan and the major constraint
being the availability of suitable
land. Some area within the land
acquired for Auto Clusters needs to
be earmarked for such potential
investors, at the uniform prices.
In view of above two Auto Clusters
are envisaged:-
• Near Steel Mills, Port Qasim,
Karachi.
• Near Motorway or on
Sheikhupura Road, Lahore.
Area:
Karachi 200 Acres
Lahore (initially) :200 Acres.
A detailed working and
requirements of envisaged
automotive clusters to achieve the
production target of 0.5 million cars
by 2011-12 is given in table below:
53
 8 – Auto Cluster Development

Identification of Processes and the Space Requirements in the Envisaged Auto

Cluster
Total Annual Total Space
Plot Size for a Plots
Process Requirement Required
unit (Acres) Required
by 2011/12 (Acres)
AC 525,000 units 3 10 30
Aluminum Castings 44,000 tons 2 40 80
Audio Systems 525,000 units 1 5 5
Ball Bearing 73.8 million nos 3 4 12
Batteries 550,000 units 2 2 4
Casting 71,500 tons 5 10 50
Door Hardware 505,000 sets 2 5 10
Fasteners 1,907 million nos 4 6 24
Forgings 16,500 tons 5 3 15
Friction material 7,458 tons 2 2 4
Glass 1.625 million m2 2 4 8
Interiors / trims 525,000 sets 5 5 25
Lights 525,000 sets 2 5 10
TIER 2 & TIER 3 VENDORS

Machining (Al. Parts) 57,200 tons 2 8 16

Machining (Casted parts) 92,950 tons 2 11 22
Machining (Forged Parts) 15,750 tons 2 3 6
Plastic 72,000 tons 4 40 160
Radiators 525,000 units 2 10 20
Rubber 38,400 tons 4 16 64
Sheet metal 270,000 tons 3 38 114
Shock absorbers 2.1 million units 3 4 12
Silencers 550,000 units 2 5 10
Speedometers 510,000 units 1 4 4
Tire 287,5000 nos 25 2 50
Wire Harness 525,000 sets 3 5 15
Water Pump 505,000 units
Fuel Pump 505,000 units
Fuel Filter 2,000,000 units
Alternator 505,000 units
Air Cleaner 2,000,000 units
Seat Recliner 505,000 units
Heat treatment Plants (contract) 2 8 16
Brake Assemblies 2 5 10
Die & Mold making 2 4 8
Pattern shop 2 4 8
Paint Shops (contract) 1 4 4
Engine 510,000 units 10 2 20
Gear Box / Transmission 510,000 units 10 2 20
VENDORS

Axle 525,000 sets 10 2 20

TIER 1

Suspension / Mcpherson struts 525,000 sets 10 2 20

Steering / Power steering
Assembly 510,000 units 10 2 20
150 282 916

54 Auto Industry Development Programme

 8 – Auto Cluster Development

NIPs Company is already working exorbitantly high prices and other

on acquisition of land for auto issues being the potential
clusters with enabling bottleneck for the new units to
infrastructure to provide for establish or for the existing ones
establishment of auto units. This to expand will be effectively taken
is anticipated that the most crucial care off.
issues of land acquisitions,

**********

Auto Industry Development Programme 55

56
 Auto Industry Investment
Policy (AIIP)

57
58
9
Auto Industry Investment Policy (AIIP)
Seeing the considerable interest of
important international auto
manufacturers in Pakistan market
and to meet the local demand supply
gap of various products,
Government has framed the rules
and procedure for the foreign
investors in the Auto Sector. The
policy rest on production of high
technology products with
environment and consumer
satisfying features.
Recognizing that the existing
assemblers / manufacturers of
vehicles have over the years
developed many parts and
components locally and the factor
that the Auto Industry is yet heavily
import dependent for various
materials and components, with
marginal exports, the salient features
of policy would remain as under:-
9.1 Definition
New Entrant means a potential
assembler / manufacturer of global
significance who had no assembly /
manufacturing of similar vehicles in
Pakistan in the past and intends to
assemble / manufacture a vehicle by
himself or through an agreement
with a Pakistani company.
Auto Industry Development Programme
9.2 Eligibility criterion
i) In case of cars, the potential new
entrant will have 500,000 units
annual production in countries
other than Pakistan.
ii) The new entrant will have
significant global presence by
way of manufacturing at least
25,000 units of trucks and buses
separately, 40,000 LCVs and at
least 50,000 units in the case of
Agriculture Tractors annually in
countries other than Pakistan.
iii) New entrant will have the plan
for the progressive
manufacturing of vehicles.
iv) New entrant will have serious
and demonstrable intention to
develop parts locally either in-
house or through the vendors to
achieve competitiveness.
v) New entrant will clearly identify
the destinations in his plan or in
agreement with its partners for
export of vehicles and parts
manufactured in Pakistan under
this policy.
vi) Registration to produce road
worthy vehicles complying to
environment standards, with the
EDB, M/o IP&SI for the
entitlement of benefits under
the scheme.
59
 9 – Auto Industry Investment Policy
vii) Proof of land acquisition in the
case of green field project or an
agreement with the owner, in
the case of existing assembly
facilities.
viii)A qualifying New Entrant will
be required to submit a detailed
business plan to EDB who will
verify the complete in-house
assembly/manufacturing
facilities etc.
ix) AIDC will assess the business
plan and other relevant
documents to determine the
eligibility criterion and to qualify
the potential new entrant for the
entitlement of benefits under
AIIP or otherwise.
9.3 Benefits
New Entrants will be allowed to
import 100% CKD kit, at the
**********
60
leviable customs duty, for a period
of three years from the start of
assembly/manufacturing.
9.4 Withdrawal of AIIP Incentive
Business plan duly submitted by the
New Entrant to the EDB on a
prescribed form will be evaluated
before allowing any permission to
start manufacturing. An annual
assessment of business plan will be
made to see any deviation and to
determine as to whether the New
Entrant has stayed on the course
and has honoured its commitment
under the policy or otherwise. In
case of any material deviation, EDB
will initiate a suitable action after
necessary verification that may lead
to the stoppage or withdrawal of
benefits allowed under the AIIP,
with retrospective effect.
Auto Industry Development Programme
Auto Industry Development
Committee (AIDC)

61
62
10
Auto Industry Development Committee (AIDC)
With the elimination of deletion
programmes from 1st July, 2006, the
major objectives of Indigenization
Committee (I.C) have also been met.
I.C. was established during May,
1995 by an order of the Federal
Cabinet to effectively oversee the
indigenization of automotives and
other goods in the country.
With the changing WTO scenario
and our commitment to TRIM’s
agreement Pakistan had to eliminate
the compulsory local content
conditions in its industrial policies.
With the elimination of over 23
deletion programmes in various
engineering goods by the year 2003,
the only remaining deletion
programmes in auto sector were also
done away with in the year 2005-
2006.
AIDC is envisaged to replace the
I.C. with the objective to provide
focused and continued attention to
the Auto Industry at a higher
Government – Private level. AIDC
aims to have a regular dialogue and
effective communication with the
industry. AIDC will encourage
private – public partnership for the
sustainable development of Auto
Industry.
AIDC will have regular deliberations
on the issues of quality, standards,
Auto Industry Development Programme
environment and consumer
satisfaction. AIDC will continuously
analyze the emerging trends in
global scenario and do out of box
thinking to identify opportunities
for auto industry and define its
direction.
AIDC will recommend to the
Government on the issues relating
to the fiscal policy, WTO,
investment, exports, trade policy,
FTA’s and other regulatory and
administrative matters which may
affect directly or indirectly the
growth and sustainable development
of Auto Industry.
AIDC will have the mandate to
provide its rulings to EDB after
making necessary documentary
verifications, reviewing sub-
committee reports or through
personal hearings or by any other
means on the claims for the benefits
under various incentives envisaged
in the AIDP. Such incentives
include productive asset investment
allowance, technology acquisition
support scheme, Human Resource
Development and other incentives.
AIDC will have regular deliberations
on safety, quality, standards,
consumer protection and regulatory
framework of the Government to
encourage emission controls.
63
 10 – Auto Industry Development Committee

AIDC will provide a vision for the
development of auto sector and will
continue reviewing the progress,
effectiveness of incentive regime
and to recommend corrections and
improvements in the AIDP
wherever necessary. AIDC will
promote industry – university
linkages, and creating awareness
amongst the academia about the
industry needs.

Composition of Members
1. Chief Executive Officer, Chairman
Engineering Development Board.
2. General Manager (Policy Development), Secretary
Engineering Development Board.
3. Joint Secretary, M/o Industries, Production & Special Initiatives. Member
4. Joint Secretary, M/o Science & Technology. Member
5. Joint Secretary, M/o Commerce. Member
6 Joint Secretary, M/o Environment. Member
7. Representative from Planning Commission. Member
8. Chief Customs (Tariff & Trade), Central Board of Revenues. Member
9. Representative from Higher Education Commission (HEC). Member
10. Managing Director, Pakistan Standards and Quality Control Member
Authority (PSQCA) or his representative.
11. Chairman, PAAPAM. Member
12. Vice Chairman PAAPAM. Member
13. Chairman, PAMA. Member
14. A Representative of Car Assemblers on rotation basis for two Member
years (out of four leading assemblers).
15. A Representative of Japanese Two / Three-wheeler Assemblers. Member
16. A Representative of Chinese Two / Three-wheeler Assemblers. Member
17. A Representative of Tractor Assemblers on rotation basis for two Member
years (out of two leading assemblers).
18. A Representative from Truck/Bus Sector on rotation basis for two Member
years (out of three leading assemblers).
19. One vendor of Sheet Metal on rotation basis for two years. Member
20. One vendor of Plastics and Rubber on rotation basis for two Member
years.
21. One vendor of Casting, Forging & Machining on rotation basis for Member
two years.
22. One vendor of Electrical and Electronics on rotation basis for two Member
years.

**********

64 Auto Industry Development Programme

ANNEXURES
67
 Annex I
Productive Asset
Investment Incentive
Form I to Form VII
64
 PAII Form -I

Productive Asset Investment Incentive (PAII)

PAII APPLICATION FOR APPROVAL

(For Auto Parts Manufacturers)

Note: Please use additional space / paper wherever necessary.

1) PARTICULARS OF APPLICANT:

• Name and Address of CEO:

• Name of the Company:
• Sales Tax Registration No:
• Physical Address of Factory:
• Postal Address:
• Contact Person:
• Tel: No.
• Fax: No.
• Cell Ph: No.
• E-mail:
• Type of Company (At least a limited liability company):

2) PARTICULARS OF REGISTERED EXTERNAL AUDITOR:

• Name and postal address of accredited audit firm:

……………………………………………………………………..
……………………………………………………………………..
• Name and postal address of the authorized person of the audit firm:
……………………………………………………………………..
……………………………………………………………………..
• Registered No. of Auditor
……………………………………………………………………..
……………………………………………………………………..

Auto Industry Development Programme 69

PAII Form -I

3) COMPANY STRUCTURE

Shareholders/members/partners Pakistan % Foreign %

% %

4) DETAILS OF PRODUCTIVE ASSETS

Only the admissible productive assets which are capitalized will be eligible for incentive
under the scheme
Description of Productive Assets Value of Claims (Pak Rs)

Value of Productive Asset number Date Previously

Current claim
Assets Installed Capitalized claimed

TOTAL VALUE

5) VALUE OF PRODUCTIVE ASSETS INSTALLED

To substantiate the value of imported assets provide the relevant import documents i.e. copy
of:-
i) Goods Declaration
ii) Invoice
iii) Bill of Lading
iv) Copy of sales tax invoice (in case of locally manufactured)

6) PRODUCT AND PRODUCTION

Provide a detailed list of auto parts that were supplied to local vehicle assemblers.

Details of Auto Parts manufactured by productive assets installed under PAII:-

Name of Description of
Description of Period of Value of
Part No. Vehicle Vehicle using
auto parts Supply Supply
Assembler such parts

Quantity of Purchase Bank Statement as Proof of

S.T Invoice No.
Supply Order No. payment

70 Auto Industry Development Programme

 PAII Form -I

Provide a cost breakdown per unit manufactured in the format below, for each of the above
auto parts.

AUTO PART A AUTO PART B AUTO PART C

Volume Volume Volume
Cost of Locally Produced Components
Cost of Locally Produced Materials
Cost of Imported Components
Cost of Imported Materials
Cost of Production
Profit/ Loss (Factory Margin)
Ex-Factory Selling Price

Provide a cost breakdown of those auto parts (highest volume and highest value) that are
produced with the approved productive assets.

DECLARATION: I hereby declare that the information in this application is a fair and true
reflection of my intended project. I am aware of the fact that the information which I have
submitted above will have a material gearing on the adjudication of the application and if it,
therefore, subsequently appears that any information in the application with addendum was
not correct, or that certain information was omitted, the EDB/ FBR shall be entitled to
withdraw or amend its approval and without prejudice to its rights, to recover any credits
already claimed or to withhold further duty credit.

……………………………………. …………………………………….
SIGNED SIGNED
(Signature of directors in the employment of
the entity In terms of partners, Board
members Resolution attached hereby)

……………………………………. …………………………………….
NAME IN PRINT NAME IN PRINT

Auto Industry Development Programme 71

PAII Form -I

AUTHORISATION BY THE COMPANY OR PARTNERS

RESOLUTION OF THE BOARD OF DIRECTORS/PARTNERS:

The Board of Directors/Partners of ............................................................ (name of company)

Hereby authorizes ......................................................................................... (name of individual),

In his capacity as .......................................................................................... to sign all documents

Pertaining to this application to the Board or any documentation pertaining thereto.

Signed at …………………..…on this ……….……….. day of ……………………)

SIGNATURE OF DIRECTORS: NAME OF DIRECTORS:

……………………………………….. ………………………………………..

……………………………………….. ………………………………………..

……………………………………….. ………………………………………..

……………………………………….. ………………………………………..

72 Auto Industry Development Programme

 PAII Form -II

Productive Asset Investment Incentive (PAII)

FORMAT TO BE USED BY MANUFACTURERS OF VEHICLES

1) Particulars of Vehicle Manufacturers

• Name and Address of CEO:
• Name of the Company:
• Sales Tax Registration No.
• Physical Address of Factory:
• Postal Address:
• Contact Person:
• Tel: No:
• Fax: No:
• Cell Ph: No:
• E-mail:
• Type of Company (At least a limited liability company):

2) COMPANY STRUCTURE

Shareholders Members Name Pakistan % Foreign %

3) PRODUCTION DETAILS
Period: (From __________ To ________ )

Cost of
Cost of Ex-factory
Name of Quantity Locally Cost of Factory
Imported Selling
the Model Produced Produced Production Margin
Auto Parts Price
Auto Parts

• Dates on which the above models will be dis-continued/ terminated

• Percentage breakdown of turnover between the local market sales and exports
• Estimated local market percentage share per model.

Auto Industry Development Programme 73

PAII Form -II

4) EMPLOYMENT PROFILE

• Provide an organogram of the company.

• Details of supervisory level staff.
• Details of workers.
5) AUTO PARTS SUPPLIER INFORMATION UNDER PAII

• Names and addresses of the local auto parts manufacturers who have qualified under
the PAII and supplied the parts during the period.
• Names of the new auto part manufacturers (suppliers approved under the PAII).
• Names of the auto parts manufacturers whose supplies have been terminated and the
reasons thereof.
Detail of auto parts purchased, which were specifically produced by the productive assets
under PAII

• Name of the Supplier.

• Sales Tax Registration No. Period (From:________ To:________).
• Description of auto parts.
• Part No.
• Total Quantity.
• Purchase Order No. and date.
• Invoice No. and date.
• Total Value of parts.
• Competitiveness / price benefits to the assembler.

DECLARATION: I hereby declare that the information in this application is a fair and true
reflection of my intended project. I am aware of the fact that the information which I have submitted
above will have a material gearing on the adjudication of the application and if it, therefore,
subsequently appears that any information in the application with addendum was not correct, or that
certain information was omitted, the EDB/ FBR shall be entitled to withdraw or amend its approval
and without prejudice to its rights, to recover any credits already claimed or to withhold further duty
credit.

……………………………………. …………………………………….
SIGNED SIGNED
(Signature of directors in the employment of the
entity In terms of Board members
Resolution attached hereby)

…………………………………….
……………………………………. NAME IN PRINT
NAME IN PRINT

74 Auto Industry Development Programme

 PAII Form -II

Please tick the forms / documents submitted along with application

• Business plan
• Fixed Asset Ledger
• Procedure of transfer of duty credit to the assembler
• Copies of Financial Statements

Auto Industry Development Programme 75

76
 PAII Form - III

Productive Asset Investment Incentive (PAII)

BUSINESS PLAN FOR THE EXISTING OR NEW AUTO PARTS

MANUFACTURERS

1.1 The investment under PAII will be in support of vehicle assemblers. Please indicate,
as to which extent the competitiveness of the assemblers will increase through your
investment in productive assets under the PAII.

1.2 Whether a contract has been awarded or a letter of intent has been received from the
assembler for the manufacture and supply of parts which will be produced by the
productive assets under the PAII. Please provide the following details:-

i) Name of the auto part manufacturer (company)

ii) Name and address of CEO
iii) Sales tax Registration No
iv) Physical Address of Factory
v) Postal Address
vi) Tel: No
vii) Fax: No
viii) Cell Ph: No
ix) E-mail:
x) Type of company (At least a limited liability company)
xi) Name and address of the assembler
xii) Description of vehicle using auto parts
xiii) Description of auto parts intended to be produced through the productive
asset installed under PAII.
xiv) The period of supply (From: ----------------To:-------------)
xv) Are these auto parts being already supplied or would these be supplied for
the first time.
xvi) What has been the previous quantity of supply (2005-2006 --------, 2006-
2007 ----------------)
xvii) What would be the quantity of auto parts intended to be supplied after
availing PAII (1st year ------------------, 2nd year--------------------, 3rd year ------
-----------, 4th year --------------, 5th year -------------------)
xviii) Will such supply of auto parts increase the local content for the assembly
of said vehicle and to which extent?
1.3 Will the investment contribute to enhancement of employment:

i) Number of total existing workers:

a. Supervisory level:
b. Workers level:
ii) Potential increase in employment 2007-08-----------, 2008-09-----------
2008-09 ---------- 2009-10 ---------- 20010-11 ----------2011-12 -----------

Auto Industry Development Programme 77

 PAII Form -III

1.4 Will investment lead to increase in the level of technology?

i) The type of technology
ii) The level of technology
iii) The mode of acquisition i.e. TAA or JV, license agreement and royalty payable
etc.
1.5 Will the net foreign exchange involvement reduce:
1.6 How the new investment, will enhance the local value addition.
1.7 How the consumer interest will be supported through investment:
• Is it based on high technology, durability, performance, price or reliability of auto
parts development?
1.8 Will the investment help in production meeting the international standards and how?
1.9 Will investments under PAII lead to more exports?
i) Will the high standard products exported and to what extent
ii) Volume of present export and markets.
iii) The new products and markets along with the value of exports due to new
investment.
1.10 Which national and international standards on environment and safety will be met
and how.
2. PRODUCT AND PRODUCTION INFORMATION
2.1 Auto Parts Manufacturers
i) Annual Production Capacity (No of units).
ii) Total Capacity utilization during the year (%).
iii) Capacity utilization per product (%).
iv) Total volume of production through productive assets under PAII.
a) Description of parts.
b) Quantity produced.
c) Period.
v) Please provide the cost breakdown part-wise:
% of Cost of % of Ex-factory
Inputs Rs/Unit
Production Selling Price
Cost of raw material and components:
C&F Value
…………………………………. ……………… ……………... ……………
a)
b) …………………………………. ……………… ……………... ……………
c) …………………………………. ……………… ……………... ……………
d) …………………………………. ……………… ……………... ……………
e) …………………………………. ……………… ……………... ……………
Total value of imported materials and
……………… ……………... ……………
components etc:

78 Auto Industry Development Programmee

 PAII Form - III

Cost of other (local) raw-materials and

……………… ……………... ……………
components etc:
Total cost of raw-materials and components etc: ……………… ……………... ……………
Direct Labour ……………… ……………... ……………
Other manufacturing costs ……………… ……………... ……………
COST OF PRODUCTION ……………… 100.0 ……………
Selling and Administration Costs ……………… ……………... ……………
Net Profit ……………… ……………... ……………
EX-FACTORY SELLING PRICE ……………… ……………... 100.0

Please provide the following details;

a) Total Annual Production.
b) Production process of the products.
Please motivate how the above structure will contribute to the business plan submitted by
you.
Please supply the following documents to verify payments received from the vehicle
assemblers:
i) Copy of commercial invoice.
ii) Copy of sales tax invoice.
iii) Bank statement indicating receipt of payment.

3. MARKETING STRATEGY
i) Indicate the size and potential growth of the market and firm’s estimated
market share per product.

ii) State which assembler and vehicle type/model will benefit from the duty credit
accrued through your productive investment.
iii) Provide the percentage breakdown of turnover in terms of local sales and
exports.

iv) Provide the names of countries to which you intend exporting the products.

v) Please specify your international competitors.

vi) Indicate your competitive advantage in terms of products, distribution,

promotion and price.

vii) How will your market share increase by availing PAII?

4. MANAGEMENT, EMPLOYMENT AND TRAINING

i) Provide an organogram of the company.
ii) Details of supervisors and workers.
iii) Specify training budget for the next 5 years.

Auto Industry Development Programme 79

PAII Form -III

5. PROTECTION OF ENVIRONMENT AND STANDARDS

i) Will the project comply with the requirements of local environment

standards and details thereof?
ii) List the possible benefits to the environment such as emission reduction, fuel
consumption and waste minimization.
iii) List any quality accreditation you have received or being received and from
which agency.
6. FINANCIAL PROJECTIONS

Please provide the following:

i) Projected income statement, balance sheet and cash flow statement for the
project from the year 1 to year 5.
ii) Please provide the most recent financial statement and the last 2 years
statements

80 Auto Industry Development Programmee

81
82
 PAII Form -IV

Productive Asset Investment Incentive (PAII)

1) FIXED ASSET LEDGER

Description Type Date of Location

Sr. Asset Supplier Reference Date of
of Productive of Commercial
# Number Name at Ledger Purchase Shop Building
Asset Asset* Production

*Eligible assets provided under PAII

Auto Industry Development Programme 83

84
 PAII Form -V

Productive Asset Investment Incentive (PAII)

1) CHECKLIST FOR EDB TO VERIFY NEW ASSETS

1 Copy of seller of asset

Import of Assets (import documents) Yes No

2 Copy of goods declaration

3 Copy of invoice

4 Copy of packing list

5 Copy of LC if applicable

6 Copy of Sales Tax invoice (in case of local purchase of assets)

7 Asset’s physical location with asset number

mentioned in asset register – identifiable

8 Verification from accounts ledger

9 Verification from audited accounts

Checklist for EDB to verify existing/ installed assets acquired under Productive Asset
Investment Incentive (PAII)

1 Assets physical location with asset number

mentioned in asset register (reference to previous
documents - verification)

2 Verification from accounts ledger

3 Verification from audited accounts

4 Annual supply of auto parts to assembler

4.1 Name of Assembler
Quantity of parts
4.2 supplied
4.3 Total Sale (in Rs.)

5 Capacity utilization (in %)

6 Reason of unutilized capacity

Name of EDB Official ___________________________

Designation ___________________________
Dated ___________________________

Auto Industry Development Programme 85

86
 PAII Form - VI

Productive Asset Investment Incentive (PAII)

APPROVAL CERTIFICATE (For Auto Parts Manufacturers)

Certificate No: ________________________
1) PARTICULARS OF APPLICANT: Date: _________________

• Name and Address of CEO:

• Name of the Company:
• Sales Tax Registration No:
• Physical Address of Factory:
• Postal Address:
• Contact Person:
• Tel: No.
• Fax: No.
• Cell Ph: No.
• E-mail:
• Type of Company (At least a limited liability company):

2) DETAILS OF PRODUCTIVE ASSETS

Only admissible productive assets which are capitalized will be eligible for incentive under
the scheme

Description of Productive Assets Value of Claims (Pak Rs)

Value of Productive Asset number Date Previously

Current claim
Assets Installed Capitalized claimed

TOTAL VALUE

Total value of duty Fresh credit awarded Previous credit Total

credit approved. (Un-used)

…………………………………….
Seal and stamp of Manager EDB
…………………………………….
Seal embossed

Auto Industry Development Programme 87

88
 PAII Form VII

Productive Asset Investment Incentive (PAII)

Procedure of Transfer of Duty Credit Certificate to Assemblers

1) PARTICULARS OF SELLER: (Auto Part Manufacturer)
• Name and Address of CEO:
• Name of the Company:
• Sales Tax Registration No:
• Physical Address of Factory:
• Postal Address:
• Contact Person:
• Tel: No.
• Fax: No.
• Cell Ph: No.
• E-mail:
• Type of Company (At least a limited liability company):
• Asset Number
• Value of Productive Asset Installed
• Total duty credit received (Rs.)
• No and date of credit certificate issued by EDB
• The amount of duty credit intended to be transferred (Rs.)
• Description of auto parts contracted for supply.
• Quantity of auto parts to be supplied to the assembler
• Duration of contract of supply
…………………………………….
Signature and stamp
…………………………………….
Seal embossed
2) PARTICULARS OF BUYER: (Assembler)
• Name and Address of CEO:
• Name of the Company:
• Sales Tax Registration No:
• Physical Address of Factory:
• Postal Address:
• Contact Person:
• Tel: No.
• Fax: No.
• Cell Ph: No.
• E-mail:
• Type of Company (At least a limited liability company):
• Amount of duty credits received
• No. and date of credit certificate issued by EDB
……………………………………. ………………………………….
Signature and stamp Seal embossed

Auto Industry Development Programme 89

90
 Annex II
Technology Acquisition
Support Scheme
Form I to Form III

91
92
 TASS Form -I

Technology Acquisition Support Scheme (TASS)

APPLICATION FORM FOR TASS

(For Auto Parts Manufacturers)

Note: Please use additional space / paper wherever necessary.

1) PARTICULARS OF APPLICANT:

• Name and Address of CEO:

• Name of the Company:
• Sales Tax Registration No:
• Physical Address of Factory:
• Postal Address:
• Contact Person:
• Tel: No.
• Fax: No.
• Cell Ph: No.
• E-mail:
• Type of Company (At least a limited liability company):
2) PARTICULARS OF REGISTERED EXTERNAL AUDITOR

• Name and postal address of accredited audit firm:

……………………………………………………………………..
……………………………………………………………………..
• Name and postal address of the authorized person of the audit firm:
……………………………………………………………………..
……………………………………………………………………..
• Registered No. of Auditor
……………………………………………………………………..
……………………………………………………………………..

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3) COMPANY STRUCTURE

Shareholders/members/partners Pakistan % Foreign %

% %

4) DETAILS OF TECHNOLOGY ACQUIRED

Only the admissible technologies which are capitalized will be eligible for support under
the scheme
Name and address of technology supplier:

Description of Technologies: Value of Technology Value of Claim (Pak Rs.) as

Acquisition (Pak Rs.) Matching Grant
Value of
Date of Date of
Technology
acquisition Capitalization
Acquired

5) VALUE OF TECHNOLOGY ACQUISITION

To substantiate the value of technology acquisition, provide the relevant documents:-

i) Copy of technology agreement / license agreement (each page of agreement duly

signed by the applicant).
ii) Proof of payment to technology supplier.
iii) Copy of remittance slip /approval of SBP in case royalty technical fee has been
paid to supplier.

6) PRODUCT AND PRODUCTION

Provide a detailed list of auto parts that were supplied to local vehicle assemblers.

Details of Auto Parts to be manufactured through new technologies:-

Description of Name of Vehicle Description of Vehicle Period of Quantity of

auto parts Assembler using such parts Supply Supply

94 Auto Industry Development Programme

 TASS Form -I

DECLARATION: I hereby declare that the information in this application is a fair and
true reflection of my intended project. I am aware of the fact that the information which I
have submitted above will have a material gearing on the adjudication of the application and
if it, therefore, subsequently appears that any information in the application with addendum
was not correct, or that certain information was omitted, the EDB shall be entitled to
withdraw or amend its approval and without prejudice to its rights, to recover any amount
already paid or to withhold further payment.

……………………………………. …………………………………….
SIGNED SIGNED

(Signature of directors in the employment of the

entity In terms of partners, Board members
Resolution attached hereby)

……………………………………. ………………………………….
NAME IN PRINT NAME IN PRINT

Auto Industry Development Programmee 95

TASS Form -I

AUTHORISATION BY THE COMPANY OR PARTNERS

RESOLUTION OF THE BOARD OF DIRECTORS/PARTNERS:

The Board of Directors/Partners of ......................................................... ..(Name of company)

Hereby authorize ........................................................................................ . (Name of individual),

In his capacity as .......................................................................................... to sign all documents

Pertaining to this application to the Board or any documentation pertaining thereto.

Signed at …………………..…on this ……….……….. day of ………………………)

SIGNATURE OF DIRECTORS: NAME OF DIRECTORS:

……………………………………….. ………………………………………..

……………………………………….. ………………………………………..

……………………………………….. ………………………………………..

……………………………………….. ………………………………………..

96 Auto Industry Development Programme

 TASS Form -I

Technology Acquisition Support Scheme (TASS)

VERIFICATION BY VEHICLE ASSEMBLERS

Detail of auto parts to be purchased, as being produced through acquisition of technologies

under AIDP.

• Name of the Supplier.

• Sales Tax Registration No. Period (From:________ To:________).
• Description of auto parts.
• Total Quantity.
• Total Value of parts.
• Competitiveness / price benefit to the assembler.

DECLARATION: I hereby declare that the information in this application is a fair and true
reflection of my intended project. I am aware of the fact that the information which I have
submitted above will have a material gearing on the adjudication of the application and if it,
therefore, subsequently appears that any information in the application with addendum was
not correct, or that certain information was omitted, the EDB shall be entitled to withdraw or
amend its approval and without prejudice to its rights, to recover any amount already paid or
to withhold further payment.

……………………………………. …………………………………….
SIGNED SIGNED

(Signature of directors in the employment of

the entity In terms of Board members
Resolution attached hereby)

……………………………………. …………………………………….
NAME IN PRINT NAME IN PRINT

Please tick the forms / documents submitted along with application

• Business plan
• Copies of financial statements
• Other Documents

Auto Industry Development Programmee 97

98
 TASS Form -II

Technology Acquisition Support Scheme (TASS)

BUSINESS PLAN FOR THE EXISTING OR NEW AUTO PARTS

MANUFACTURERS

1.1 Please indicate, to which extent the competitiveness of your products and processes will
increase through acquisition of technologies.

1.2 Whether a contract has been awarded or a letter of intent have been received from the
assembler for the manufacture and supply of parts which will be produced through
technology acquisition and support from the fund. Please provide the following details:-

i) Name of the auto parts manufacturer (company).

ii) Name and address of CEO
iii) Sales tax Registration No
iv) Physical Address of Factory
v) Postal Address
vi) Tel: No
vii) Fax: No
viii) Cell Ph: No
ix) E-mail:
x) Type of company (At least a limited liability company)
xi) Name and address of the assembler (buyer of auto parts).
xii) Description of vehicles using auto parts
xiii) Description of auto parts intended to be produced through technology
acquisition support scheme.
xiv) The period of supply (From: ____________ To: ___________)
xv) Are these auto parts being already supplied or would these be supplied for the
first time.
xvi) What has been the previous quantity of supply (2005-2006 _____, 2006-2007
________).
xvii) What would be the quantity of auto parts intended to be supplied after availing
TAS scheme (1st year -------------, 2nd year-------------, 3rd year ------------------,4th
year ------------------, 5th year ---------------)
xviii) Will such supply of auto parts increase the local content for the assembly of
said vehicles and to which extent?

1.3 Will the investment contribute to enhancement of employment:

i) Number of total existing workers:

a. Supervisory level: _________
b. Workers level: ____________
ii) Potential increase in employment 2007-08_______, 2008-09______
2008-09______ 2009-10______ 20010-11 _______2011-12_______

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1.4 Will investment lead to increase in the level of technology?

i) Description of technology
ii) Will technology acquisition lead to production of new components or improve
the present products.
iii) Will technology acquisition improve the manufacturing processes and how?
iv) The mode of acquisition i.e. TAA, JV, license agreement and royalty payable etc.
v) Please provide a copy of an agreement entered with the technology provider.

1.5 Will the net foreign exchange involvement reduce?

1.6 How the new investment, will enhance the local value addition.

1.7 How the consumer interest will be supported through investment:

• Is it based on high technology, durability, performance, price or reliability of

auto parts development or vehicles assembled through such parts?

1.8 Will the investment help in production meeting the international standards and how?

1.9 Will investment in technology acquisition lead to more exports?

i) Will the high standard products exported and to what extent
ii) Volume of present export and markets.
iii) The new products and markets along with the value of exports due to new
investment.
iv) Any buy back arrangement with JV, TA partner.

1.10 Which and how national and international standards on environment and safety will
be met, through acquiring new technologies.
2. PRODUCT AND PRODUCTION INFORMATION
2.1 Auto Parts Manufacturers
i) Annual Production Capacity (No of units).
ii) Total Capacity utilization during the year (%).
iii) Capacity utilization per product (%).
iv) Total Volume of Production through Technology Acquisition Support.
a) Description of parts.
b) Quantity produced.
c) Period.
v) Please provide the cost breakdown part-wise:

100 Auto Industry Development Programme

 TASS Form -II

% of Cost of % of Ex-factory
Inputs Rs/Unit
Production Selling Price
Cost of raw material and components etc:
C&F Value
…………………………………. ……………… ……………... ……………
a)
b) …………………………………. ……………… ……………... ……………
c) …………………………………. ……………… ……………... ……………
d) …………………………………. ……………… ……………... ……………
e) …………………………………. ……………… ……………... ……………
Total value of imported materials and components
……………… ……………... ……………
etc.
Cost of other (local) raw-materials and components
……………… ……………... ……………
etc:
Total cost of raw-materials and components etc ……………… ……………... ……………
Direct Labour ……………… ……………... ……………
Other manufacturing costs ……………… ……………... ……………
COST OF PRODUCTION ……………… 100.0 ……………
Selling and Administration Costs ……………… ……………... ……………
Net Profit ……………… ……………... ……………
EX-FACTORY SELLING PRICE ……………… ……………... 100.0

Please motivate how the above structure will contribute to the business plan submitted by
you.

Please supply the following documents to verify the supplies made to the vehicle assemblers:

i) Copy of commercial invoice.

ii) Copy of sales tax invoice.
iii) Bank statement indicating receipt of payment.

3. MARKETING STRATEGY

i) Indicate the size and potential growth of the market and firm’s estimated
market share per product
ii) State which assembler and vehicle type/model will benefit from your
investment in technologies.
iii) Provide the percentage breakdown of turnover in terms of local sales and
exports.
iv) Provide the names of countries to which you intend exporting the products.
v) Please specify your international competitors.
vi) Indicate your competitive advantage in terms of products, distribution,
promotion and price.
vii) How will your market share increase by availing technology support?

4. MANAGEMENT, EMPLOYMENT AND TRAINING

Auto Industry Development Programmee 101
TASS Form -II

i. Provide an organogram of the company.

ii. Details of supervisors and workers.
iii. Specify training budget for the next 5 years.

5. PROTECTION OF ENVIRONMENT AND STANDARDS

i. Will the project comply with the requirements of local environment standards
and details thereof?
ii. List the possible benefits to the environment such as emission reduction, fuel
consumption and waste minimization.
iii. List any quality accreditation you have received or being received and from
which agency.

6. FINANCIAL PROJECTIONS

Please provide the following:

i. Projected income statement, balance sheet and cash flow statement for the
project from the year 1 to year 5.
ii. Please provide the most recent financial statement and the last 2 years
statements.

102 Auto Industry Development Programme

103
104
 TASS Form -III

Technology Acquisition Support Scheme (TASS)

APPROVAL CERTIFICATE
Approval No: ________________________
(For Auto Parts Manufacturers) Date: _________________

1) PARTICULARS OF APPLICANT:

• Name and Address of CEO:

• Name of the Company:
• Sales Tax Registration No:
• Physical Address of Factory:
• Postal Address:
• Contact Person:
• Tel: No.
• Fax: No.
• Cell Ph: No.
• E-mail:
• Type of Company (at least a limited liability company):

2) DETAILS OF TECHNOLOGY ACQUIRED

Only the admissible technologies which are capitalized will be eligible for support under the
scheme

Description of Technologies
Value of Value of Claims
Technology (Pak Rs.) as
Value of Acquisition Matching Grant
Date of Date
Technology (Pak Rs.) approved
acquisition Capitalized
Acquired

…………………………………….
Seal and stamp of Manager EDB
……………………………………
Seal embossed

Auto Industry Development Programme 105

106
 Annex III
Auto Industry Investment
Policy – Form I

107
108
 AIIP - Form I

Auto Industry Investment Policy (AIIP)

1. Details of New Entrant

i) Name of the company

ii) Name and address of CEO
iii) Details (names & addresses) of Directors / Partners
iv) Physical location and address of the corporate/head office
v) Physical location and address of the plant/factory
vi) Sales Tax Registration No
vii) Tel No
viii) Fax No
ix) Cell Ph
x) E-Mail
xi) Description of models to be produced
xii) The model wise production during next five years (1st year ---------, 2nd year---
-------------, 3rd year---------------, 4th year------------------, 5th year-------------)

2. Present Production Information

i) Places of global production and addresses.

ii) Details of the vehicles including makes
iii) Total annual production year wise for the last three years
iv) The relationship of the applicant

3. Please provide corporate profile of the parent company and nature of relationship with
parent company. In case of JV partnership, please provide copy of agreement and
details of JV partner.

4. The total investment involved on the project (Pak Rs.)

5. Source of funding (foreign or local)

6. Investment on assembly plant, paint shop, testing facilities etc

7. Investment on vendor development

8. Investment on sales activity

9. Type of project

i. Whether a green field project

ii. or a contract assembly facility

10. Do the products possess latest technologies and how?

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AIIP - Form I

i) The type of technology

ii) The level of technology
iii) The mode of acquisition whether TAA or JV, license agreement and royalty
payable etc.
11. Will the net foreign exchange involvement reduce during the next three years, how
and to which extent?

12. How the international competitiveness will be achieved and the steps undertaken for
the purpose

13. How the local value addition through the assembly / manufacturing of vehicles will
increase.

14. How the consumer interest will be supported:

• Is it based on high technology, durability, performance, price and after sale

service?

15. Will the investment help in high standard production meeting the international
standards?

16. What is your export plan?

i) Provide details of export markets you have been authorized by the parent
company / J.V partner
ii) Will the high standard products exported and to what extent
iii) Value of export in next five years.

17. Which national and international standards on environment and safety will be met
and how.

MANAGEMENT, EMPLOYMENT AND TRAINING

1. Provide an organogramme of the company.

2. Details of supervisors and workers.
3. How and to which extent the employment will increase in next five years.
4. Specify training budget for the next 5 years.
PRODUCT AND PRODUCTION INFORMATION

1. Annual Production Capacity (No of Units).

2. Expected Capacity utilization during the next three years (%), (1st year-----, 2nd year --
------------------, 3rd year -----------------------------).
3. Capacity utilization per model (%), (1st -------------, 2nd ----------, 3rd ----------).
4. Total Volume of Production (model wise).
5. Description of models to be produced in next three years.

110 Auto Industry Development Programme

 AIIP - Form I

6. Please provide the estimated cost breakdown of vehicles produced in the first year:
% of Cost of % of Ex-factory
Inputs Rs/Unit
Production Selling Price
Cost of raw material and components etc:
C&F Value
…………………………………. ……………… ……………... ……………
a)
b) …………………………………. ……………… ……………... ……………
c) …………………………………. ……………… ……………... ……………
d) …………………………………. ……………… ……………... ……………
e) …………………………………. ……………… ……………... ……………
Total value of imported materials and
……………… ……………... ……………
components etc.
Cost of other (Local) raw-materials and
……………… ……………... ……………
components etc:
Total cost of raw-materials and components etc ……………… ……………... ……………
Direct Labour ……………… ……………... ……………
Other manufacturing costs ……………… ……………... ……………
COST OF PRODUCTION ……………… 100.0 ……………
Selling and Administration Costs ……………… ……………... ……………
Net Profit ……………… ……………... ……………
EX-FACTORY SELLING PRICE ……………… ……………... 100.0

7. Plan to develop the auto parts locally;

a. Description and value of auto parts (Pak Rs.) to be developed in-house or
purchased locally.
i. First year of production
ii. Second year of production
iii. Third year of production

b. Details of parts manufacturers, will be duly submitted, year wise.

c. Copies of memoranda of understanding duly signed with parts manufacturers will
be duly submitted.
8. Provide details of auto parts which will be purchased from local auto parts
manufacturers;
Description of Name and address of auto Description of Vehicle/model using
Part No.
parts parts manufacturers such parts

Value of Quantity of Period of supply Purchase

S.T Invoice No.
Supply Supply Order No.

Auto Industry Development Programmee 111

AIIP - Form I

9. To which extent use of local auto parts will increase the local content for the assembly
of said vehicle?
10. Please motivate how the above structure will contribute to the business plan submitted
by you.

MARKETING STRATEGY

1. Indicate the size and potential growth of the market and firm’s estimated market
share per product.

2. Provide the percentage breakdown of turnover in terms of local sales and exports,
for the next five years.

3. Provide the names of countries to which you intend exporting the products.

4. Please specify your international competitors.

5. Indicate your competitive advantage in terms of products, distribution, promotion

and price.

6. How will your market share increase?

PROTECTION OF ENVIRONMENT AND STANDARDS

1. Will the project comply with the requirements of local environment standards and
details thereof?
2. List the possible benefits to the environment such as emission reduction, fuel
consumption and waste minimization.
3. List any quality accreditation you have received or being received and from which
agency.

112 Auto Industry Development Programme

 Annex IV
Working Groups

113
114
 Working Group

Working Groups

HRD Committee

1. Mr. Sohail P. Ahmed, Chief Executive, Chairman

Thal Engineering Ltd.
2. Mr. Zahid J. Yaqub, General Manager (Policy Dev.) Secretary
Engineering Development Board
3. Mirza Nasir Baig, Dy. General Manager/Incharge (Tariff), Member
Engineering Development Board
4. Mr. Shahid Zubair, General Manager, AT&TC Member
5. Mr. Feroz Khan, Chief Executive Officer, Member
Adam Motor Company Ltd.,
6. Chairman, PAAPAM Member
7. Vice Chairman, PAAPAM Member
8. Director General, PAMA Member
9. One Representative from Car/LCV Sector Member
10. One Representative from HCV Sector Member
11. One Representative from Tractor Sector Member
12. One Representative from 2/3-Wheeler Member
13. Mr. Zaheeruddin Dar, Consultant, DART Member

Technology Acquisition Support and R&D

1) Mr. Almas Hyder, Chairman, Chairman

TUSDEC
2) Mr. Zahid J. Yaqub, General Manager (Policy Dev.) Secretary
Engineering Development Board
3) Mirza Nasir Baig, Dy. General Manager/Incharge (Tariff), Member
Engineering Development Board
4) Dr. Shaukat Hameed Khan, Member (Science & Technology), Member
Planning & Development Division
5) Mr. Sohail P. Ahmed, Chief Executive, Member
Thal Engineering Ltd.
6) Mr. Feroz Khan, Chief Executive Officer, Member
Adam Motor Company Ltd.,
7) Mr. Salman, Member
Kor Tech Auto Industries (Pvt.) Ltd.
8) Mr. Shehryar Khan, Joint Technological Adviser, Member
M/o Science & Technology
9) Chairman, PAAPAM Member
10) Vice Chairman, PAAPAM Member
11) Director General, PAMA
12) Representative of Car/LCV Assemblers Member
13) Representative of HCV Assemblers Member

Auto Industry Development Programme 115

Working Group

14) Representative of Tractor Assemblers Member

15) Representative of 2/3 Wheeler Assemblers Member
16) Mr. Zaheeruddin Dar, Consultant, DART Member

Auto Cluster Development

1) Mr. Mohsin Syed, Managing Director, Hybrid Technics (Pvt.) Ltd, Chairman
Regional Director (North)
Pakistan Industrial Parks Development & Management Company (NIPs)
2) Mr. Zahid J. Yaqub, General Manager (Policy Dev.) Secretary
Engineering Development Board
3) Mr. Shafeeq, Dy. Manager (Sector Development Group), Member
Engineering Development Board
4) Chairman, PAAPAM Member
5) Vice Chairman, PAAPAM Member
6) Director General, PAMA Member
7) Syed Nabeel Hashmi, Chief Executive Officer, Member
Thermosol Industries (Pvt.) Limited.
8) Mr. Abdul Razzaque Goheer, Chief Executive Officer, Member
Infinity Engineering
9) Representative from Car/LCV Assemblers Member
10) Representative from HCV Assemblers Member
11) Representative from Tractor Assemblers Member
12) Representative from 2/3 Wheeler Assemblers Member

Productive Asset Investment Incentive

1) Syed Nabeel Hashmi, Chief Executive Officer, Chairman

Thermosol Industries (Pvt.) Limited.
2) Mr. Zahid J. Yaqub, General Manager (Policy Dev.) Secretary
Engineering Development Board
3) Mirza Nasir Baig, Dy. General Manager/Incharge (Tariff), Member
Engineering Development Board
4) Syed Muhammad Shoaib, Secretary Customs (Tariff I&II), Member
Federal Board of Revenue (FBR)
5) Mr. Feroz Khan, Chief Executive Officer, Member
Adam Motor Company Ltd.,
6) Chairman, PAAPAM Member
7) Vice Chairman, PAAPAM Member
8) Director General, PAMA Member
9) Representative from Car/LCV Assemblers Member
10) Representative from HCV Assemblers Member
11) Representative from Tractor Assemblers Member
12) Representative from 2/3 Wheeler Assemblers Member
13) Mr. Zaheeruddin Dar, Consultant, DART Member

116 Auto Industry Development Programme

 EDB

Ministry of Industries, Production Engineering Development Board

& Special Initiatives 5-A, Constitution Avenue,
‘A’ Block, Pak Secretariat, Islamabad.
Islamabad Ph: 051-920 5595-8
www.moip.gov.pk Fax: 051-9202108
www.engineeringpakistan.com